3rd > April > 2004 Archive

Why Sun threw in the towel in Mankind vs. Microsoft

AnalysisAnalysis Principles are fine things to have, but only if you can afford them. With its stock declared a 'junk bond' and finishing a terrible quarter, Silicon Valley's leading Microsoft antagonist Sun Microsystems has now decided it can't. The news will have surprised the company's lawyers, who only this week were girding themselves for the next round of litigation. It appears that for almost $2 billion, Microsoft has bought its way out of a lot of trouble. In truth however, both parties realized that the EU decision, which is still pending appeal, was a watershed. Microsoft doesn't have any more nasty surprises to face from the US, EU or States, and Sun realized that it couldn't push any more severe penalties out of the process. What could Sun achieve by proceeding with its 2002 lawsuit? The lawsuit asked for $1 billion in damages; today's settlement yields Sun $700 million for antitrust issues - less than what it wanted - and a further $1,250 million covering patent royalties - which is more than what it wanted. But the hardest thing for Sun to swallow will be its pride. McNealy had presented the fight in apocalyptic terms: Mankind vs Microsoft. Late last year in closed door hearings, Sun lawyers denounced Microsoft's new protocol licensing program as ineffective. Now Sun has become the biggest licensee of Microsoft protocols, giving the program credibility it lacked. Sun had testified how Microsoft torpedoed Project Cascade - which was based on a widely licensed piece of software from AT&T called Advanced Server for UNIX, which was itself based on Windows source code. When Sun wanted to buy the product outright, Microsoft broke its agreement with AT&T and cancelled the source contract. That was illegal, of course, and AT&T collected a cash settlement, but it has reflected the tone of Microsoft's legal strategy. If found guilty, Redmond can always buy its way out of trouble. Caldera picked up the Digital Research suit against Microsoft and sought $1.6 billion in damages. DR-DOS had as much as any competitor could hope for: a clearly superior, compatible product that cost OEMs less. In the end Microsoft settled for $155 million damages. Clear cut cases brought by Bristol Technology and Be Inc. were settled before they even reached the courtroom. Microsoft's deep pockets bought the company plenty of patience. Despite a catastrophic verdict in the Federal Antitrust trial, Microsoft simply waited for the installation of a new regime at the Department of Justice more interested in punishing public nudity and file sharing than unethical business practices. When the individual States revolted at the settlement, Microsoft simply waited until the recession induced cash crises bought the States' attorneys back to the table. Microsoft's greatest stroke of luck was finding an EC competition commissioner more interested in cash than industry dynamics, and even Monti's paltry settlement may still be undone on appeal. Through good fortune and its own green fortune, Microsoft has seen off its severest legal threats. Although Real Networks' case is outstanding, the chapter that began with the FTC's investigation in 1991 is now surely over. What does Sun stand for, now? Meanwhile at Sun, staff will be wondering if the company, which defined itself by its opposition to Microsoft, has a reason to exist. It's a task for Jonathan Schwartz, Sun's COO and new Number 2. Sun's pugilism was often characterized as cynical marketing: Sun has always punched above its weight, and even at the height of the Internet bubble was dwarfed by IBM and HP. But not only did executives from McNealy on down really believe their own rhetoric, that rhetoric was largely true. Sun was the only direct competitor in business computing that had the freedom to criticize Microsoft, as it was the only company with an influence on enterprise IT standards that wasn't a Windows licensee. Let's keep things in perspective. Microsoft's unethical business practices should be put into context. Unlike the pharmaceutical cartel or arms manufacturers, Redmond doesn't overturn democracies or kill thousands of civilians; unlike News Corporation it doesn't debase social discourse or undermine language. Unlike Google, it doesn't pretend to present "all the world's knowledge", when most of the world's knowledge isn't even on the Internet. Microsoft simply makes some fairly mediocre software and charges a lot for it. But for Sun, which had rose through the ranks of a dozens similar workstation manufacturers through foresight, engineering skill and hard competition, Microsoft's mediocrity is an affront. Few companies can afford Q&A disasters in their core product lines, as Sun knows when it endured a torrid time upgrading its SunOS customers to Solaris. And huge opportunities were lost when Sun failed to execute, such as the potential leadership of the embedded processor market that the Java picochip promised, but couldn't deliver. Thanks to its monopoly position Microsoft can afford to release sloppy software and not worry about the repercussions. This has been a very real culture clash of engineering values. Now Sun has the job of defining what it stands for from scratch. Microsoft's biggest global competitors are exactly as they were on Thursday: Nokia and Sony, two companies whose core revenues don't derive from Windows and who can set global standards. (IBM has every motivation to fund Linux development, which Redmond really doesn't like at all, but IBM doesn't have the inclination to set standards elsewhere and can't dictate consensus in the OSS space). Not that it's any consolation on Sun's Blackest Friday, but if Mankind had to be represented in an Independence Day scenario, most people would rather it was Sun engineers downloading the Trojan onto the alien's computers, and not Microsoft engineers. Related Stories Sun settles with MS for $2bn (ish) Sun waves goodbye to 3,300 staff MS gets EU fine, orders for server info and WMP-free Windows
Andrew Orlowski, 03 Apr 2004

Google mail is evil – privacy advocates

This week should have seen a public relations triumph for Google. The company began offering a free e-mail service with 100 times as much storage as Yahoo's $59.99 service. Instead the criticism has taken Google by surprise, as privacy advocates who had never before voiced criticism stepped forward. Google has previously responded to privacy concerns by saying, "we're nice, trust us" or pointing users to the company's mission statement of "do no evil". Such trite sentiments didn't work this time; even The Drudge Report piled in. Google executives had ignored a fierce internal debate over the ethics of the service and on Wednesday afternoon rushed out a jokey April 1 press release, ostensibly to trump a New York Times scoop. But it isn't so much Google searching email that has caused the anxiety from privacy watchdogs this week, as the company's confused retention policy. What will Google do with that data? Google's cookie is an index for all your searches until 2038, and sits alongside an Orkut cookie that tells Google - or friendly law enforcement officials or marketeers - exactly who you are. Google's Gmail will complete the picture, indexing private electronic discourse under the main Google search cookie. "Once users register for Gmail, Google would be able to make that connection, if it chose to," Pam Dixon, head of the World Privacy Forum told the Los Angeles Times. "And if Google ever compared the two sets of data there are some people who would be chilled and embarrassed." Richard Smith, formerly at the Privacy Foundation pointed out that "Google kind of makes it easy to connect all the dots together." Rather than allay these fears, Google's accident-prone co-founder Larry Page refused to rule out a future policy of 'joining the dots'. A simple "No, Never" would have prevented much of the damage. But asked if Google planned to link Gmail users to their Web search queries, Page replied: "It might be really useful for us to know that information. I'd hate to rule anything like that out." Google's Gmail privacy policy points out that your email will be retained even after you close your account - "The contents of your Gmail account also are stored and maintained on Google servers in order to provide the service. Indeed, residual copies of email may remain on our systems, even after you have deleted them from your mailbox or after the termination of your account." At a time when the American Library Association is advising librarians to destroy records of borrowing as soon as they can, to protect users privacy, it's an odd time to be boasting about infinite retention. Clearly there's something of a reality gap in the upper echelons of the Googleplex. There's a disconnect between the jokey launch, and the statement that "machines, not humans" will read email that's every bit as unnerving as a President making jokes while citizens are being dismembered. For archivist Daniel Brandt, it's reminiscent of the Doubleclick privacy scandal. "Doubleclick bought acquired a company that had names and address in their database, and gleefully announced that now they could monetize their massive cookie and web-bug database by correlating it with names of individuals," he told us. "The privacy advocates jumped all over that one (it was in year 2000 or so), and Doubleclick had to abandon their plans. This time it's the same issue, but it's all within one company." "While Google brags that no humans will read your emails, the entire Gmail program will involve extensive automated profiling of you as an individual. Google will be sharing the non-identifiable portions of your profile with anyone they choose. If the ownership of Google changes, or there is a merger, the entire personally-identifiable profile will be available to the new owners or partners." Google has done an extraordinary job of sidestepping human responsibility by deploying machine rhetoric (what we call the 'Bill Gates defense') . But now it has to deal with grown ups, and this is its severest PR test yet. The rationale behind going public is business expansion; but Google can't add services unless people trust it.® External Link 'Delete your Google cookie before and after' Gmail "Privacy" Policy 'How I Leared To Stop Worrying' (and love Google) [incomprehensible] Related Stories Google launches email, takes the Bill Gates defense Google promotes Froogle Google revives discredited Microsoft privacy policy for Friendster clone Yahoo! Rips! Up! Privacy! Policy! Microsoft alters Passport Terms to stem Hotmail defections
Andrew Orlowski, 03 Apr 2004