Year: 2010

When I think of technology and what is successful and what is not, what ends up being a big success is not necessarily new, but something that has been tried many times before.  It just took someone or some company to take a different approach to make it a huge success.  When I look around the industry at the state of what is becoming the eReader space its interesting to see how it has evolved from its inception to the current rage, the current rage being the Apple iPad.

As is usual for me I guess I have to leverage those 18 years at Microsoft.  Some of my “former” readers find this very boring, but I think for this little blog its a good place to start.  Since the dawn of Microsoft R&D one of the things they have worked extensively on was eReader technology.  Microsoft Research (MSR) was launched in 1991 right around the time I started with the company.  It was one of the earliest Microsoft mantra’s -“to provide the technology for the paperless office”.  Trying to move books to the PC seemed like a great place to start.  Probably most people do not know this or do not care because during all those years not much in the way of a product was actually released.  They did invent something called Clear Text which was cool as it looked and read like a book when and was not very hard on the eyes.  In fact most of what I see today in the industry is Clear Text. But true to Microsoft they looked for partners to create the “wow” experience.

It was a long time before anyone figured this out to make it popular on a wide scale.  It came from what would seem an unlikely candidate, Amazon.  I only say unlikely because up to tha point they were really a eCommerce site.  However when you  think about all the relationships they have with the major publishers it made sense.  It is expensive to carry an inventory of books and ship books.  When it is all stored and delivered digitally then the margins become much more attractive. The Kindle became a huge success from Amazon and an eye opener for the industry.  This idea of reading paperless books and been envisioned for so long but the dream of success had never been achieved.  I first saw one of these devices on a flight.  An older gentleman was sitting next to me in First class.  He was showing it off to one of the flight attendants and I could not help but ease drop.  The Kindle was elegant just based on its simplicity.  It allowed you to change font sizes at a click of a button.  This was great in my eyes, since as I get older it is getting harder to see. then there is the sheer quantity of books that can be stored on your Kindle.

However when I look at the Kindle, despite its current success I view it as a stepping stone technology.  That technology that is great and popular until something better comes along.  There are a lot of past and current examples of these type of technologies.  Tivo seems to me likely to fall behind as a home media server finally takes hold (xBox is going down this path).

The new rage and the one that I think will be around for a while is the Apple iPad.  Unlike the Kindle it is not a single function device but allows users to read, watch videos and play music to name but a few things in a seemless user-friendly experience.  We over use the term “user-friendly” in technology but in the end it cannot be emphasized enough.  Simply because so many companies say it, but fail to deliver upon it.  Then there is the question of how many devices to I want to lug around, the more I can condense my devices into one device the better my experience.   The iPad is yet another big hit for Apple and one that seems destined to sink those in the eReader space who oppose it.

It will be interesting to see if Amazon will be able to respond to the threat of iPad or carve out a niche for itself.  I think they will be very challenged to keep pace with the innovation coming from Apple.  Not to mention the fact that Apple is leading the consumer technology industry in defining the term “user-friendly”.  As I said in the beginning what is being done with content is not new, it is not as if it has not been envisioned.  It has just taken time for everything from device form factor, to software experience to content distribution to fall into place.  But that time has finally arrived and now there is no turning back.

Good Night and good Luck

Hans Hoffmann August 31st 2010

It is hard to believe in technology how far we have come in such a short time.  Through the years companies have come and gone.  There were times when the “hot” companies were Sun Microsystems, AOL, Yahoo, WordPerfect, Lotus, Novell, Informix, Enron, Qwest (pre-USWest acquisition), MySpace etc..It is a long list.  Some are still around but a shadow of what they once were.  Today we have a whole host of new “glamour” companies like VMWare, SalesForce.Com, Google, Research in Motion, Facebook, Twitter etc..Some of these companies will survive others will burn out in a flame of glory and still others will slowly die or be acquired.  There are a few stalwarts who have survived.  Some died and came back like Apple.  Others have just plodded along achieving great success later like Adobe.  In my many years in tech one company that is a constant and I have admired from a far is Oracle.

Founded by the eccentric and eclectic Larry Ellison Oracle has risen from nothing to make Larry one of the. richest guys on the planet.  I first heard of Oracle back at my first MGX in San Diego in 1904.  Microsoft was building a database business with SQL Server and had targeted Sybase and Oracle as its two strongest competitors.  At the time we knew we were no match for Oracle.  We were going to tackle Sybase first and then go after Oracle.  I remember quite well Bill Gates on stage talking about the future and going after Oracle.  Microsoft felt that they were priced way too high and that eventually would come back to haunt them.  Bill even poked a little fun at Larry Ellison saying, “I could pick on Larry, but that would be too easy”.  Sixteen years later the fight goes on.

There are a lot of characteristics about Oracle that have allowed them to succeed.  One area in the industry where they are legendary is their sales force.  Oracle has the reputation of being cut throat in sales.  Only Type A personalities need apply.  It is interesting to note that the culture was created by a man who was a former Mormon Bishop.  It’s well know in the  industry that at Oracle you can be a superstar one month and irrelevant the next.  Microsoft’s sales culture does not have that type of attitude.  A large part is due to the licensing practices Microsoft has which creates a situation where a Microsoft rep has sold a bunch of licenses that may be sitting on a shelf and the Microsoft  field force is not incented to get customers to utilize.  Oracle also in the enterprise space has partners willing to sell in Oracle solutions to customers,  Having competed against Oracle the value of these partners solutions is very hard to win against. It is especially hard when those partners do not have an equivalent Microsoft based offering.  On top of that most enterprise customers have a lot of Oracle DBA’s.  As the CIO of T-Mobile once told me, “I don’t know what they do but I pay them”.  When you add all these things together – aggressive sales force, strong partner channel, and an army of DBA’s trained on Oracle you have a hard to beat competitor.  In my opinion current Microsoft COO Kevin Turner would fire the Microsoft sales force in a heartbeat to have Oracle’s

Oracle is an enterprise company.  Larry Ellison goes where there is lots of money.  Enterprises have lots of money.  I admire the focus Oracle has on selling into the enterprise.  Beyond selling into the enterprise Oracle has enhanced its position with a focus on acquiring companies that help facilitate more sales into the enterprise.  They acquired Siebel the dominant CRM vendor.  They acquired ERP power PeopleSoft.  For the middle tier they acquired BEA Systems.  For the developer (and hardware vendor) they went out and got Sun Microsystems (in the enterprise Java rules).  I will add that as part of this acquisition of Sun they also got MySQL, the number one open source database.  Since open source means it is free, Oracle is quietly killing it as Larry Ellison makes no money. In my opinion they have been very smart in who they went after and how they would fit into the Oracle empire.

I would add that this focus has blunted Microsoft ability to overtake Oracle as the leader in enterprise databases.  Oracle continues to have customers believe they can scale where others cannot (besides TeraData).  Despite Microsoft’s continued improvements in this area and all start cast of database people (Gordon Bell, Dave Campbell, Bill Baker and the late Jim Gray).  When I went into accounts they never knew or believed that SQL Server scaled beyond one terabyte.  I attribute this to Oracles efforts to suppress it and Microsoft’s marketing inability to promote it. 

Oracle like Microsoft has its own image problems.  But when I look at Oracles competitive landscape it is not as broad a Microsoft’s and many of the competitor duels as partners like SAP and Salesforce.Com.  They compete against Tibco in the middle tier, but Tibco is a big J2EE shop, so not all bad now that Oracle owns Java.  Oracle has had its share of failures like when they were going to overtake Microsoft Exchange as an email platform   Though I did find it humorous at an Exchange Conference they rolled up an espresso stand for attendees and provide free latte’s along with a promotion for their email system.  They were also smart with Linux and XML.  They jumped all over the Linux OS.   The OS is free but pay Oracle.  On XML I met with Microsoft guru and industry legend Don Box (Don was one of the people who wrote SOAP). Microsoft was just starting to jump on XML.  We were prepping for a meeting with ATT Wireless and he was going to cover UDDI. He said , “Oracle is five years ahead of us”.  I was depressed but when I guy like Don Box speaks it carries a large amount of weight.  He did the whole presentation to ATT Wireless in Notepad.  I was impressed.

There are many things to admire and despise about Oracle but in the end they have never wavered on their business and technical focus.  They continue to lead in the database market after all these years.  as I started the blog so many have competitors have come and gone over the course of time , but Oracle has always had the grit to survive.  I have no doubt in ten years we will still be talking about Oracle.

Good Night and Good Luck

Hans Hoffmann August 19th 2010

The “monkey boy” comment came up several years ago when YouTube was first starting and a Ballmer video surfaced of him going nuts on stage in front of 15,000 people. It was interesting to see and hear the general publics reaction to this video. What kind of guy is running Microsoft?  What a psycho.  Wierdo.  Nut job.  It ran a lot on the local news. 

Having been at Microsoft for a long time I did not even blink an eye when I saw the video.  After all I had seen it so many times I frankly could not see what all the fuss was about. The Microsoft Global Sales Summit (later changed to Exchange) was where this always happened.  In my 18 years at Microsoft I went to 14 Sales summits. .  Always in July and always somewhere really hot. I always got to see Steve running around the crowd, jumping up and down, listening to his voice go horse, etc..  So lets run through my favorite “monkey boy” moments.

Climate wise the first was probably the best as it was in San Diego.  I can’t remember much of Steve from that meeting.  He came out yelling and screaming, so the new exec who followed Steve just thought that was what you do.  He came out yelling and screaming.  I don’t have the  definition of fool handy but I am sure that execs name can be found in the definition,

In 1996 we went to Montreal.  I like that city and the province, “Jem le Quebec”.  We always had a big opening act.  We had members from the dance troop from the musical “Stomp”  Very cool as they came about with 5 foot bamboo staffs.  Pounding the stage with those staffs and dancing and jumping it was great entertainment.  All of a sudden from backstage like a caged lion who had been released comes 260lbs of Steve Ballmer with a 5 foot staff.  Now you want to see some one pound a stage and jumping with mega force and screaming, well that was Steve.  It was very motivating.  After that he went to the podium and attempted to speak french.  Not so good, but a positive memory was imprinted in my heart and soul.

In 1999 we went to San Francisco.  As Mark Twain once said, “The coldest winter I ever spent was a summer night in San Francisco”.  It was the only sales summit I can remember being cold at.  It was just before the DOJ case was to burst into the mainstream media.  It was the first time i had felt the mood at a Microsoft Summit was a bit down.  Steve came out as always  the San Francisco convention center.  He was rather heavy at this time, looking like we was enjoying the life of a CEO.  When he finally finished his run  around the center he got up to speak.  The problem was he was so out of shape and so winded he could hardly speak.  I just kept thinking, “great, this is just f***ing great.  The company I love is about to be put on trial for anti-trust and our CEO is about to have a heart-attack and die in front of 12,000 people”.  The monkey boy lived.

A few years later we were in Atlanta.  It was July. It was hot. I was walking around the conference center in downtown Atlanta when I spotted Steve going down an escalator.  What struck me as odd was he was wearing a rather heavy and ugly brown coat.  It will be explained a little later.  Now one thing about Steve is when he is on stage he perspires..a lot.  At one company meeting hosted by Dana Carey (of SNL fame), Dana had three words of advice for Steve “Aired Extra Dry”.  When Steve finally got on stage after dashing around the crowd it was quite apparent what was going on.  He was as sick as a dog (thus the reason for the big brown coat).  After 5 minutes he was not just sweating he was drenched.  His collar was completely soaked.  Steve managed to speak for 2 hours.  It was a great moment of leadership, passion and love for the company.  Orlando Ayala our VP of WorldWide sales acknowledged the performance afterwards as he should.

With the years passing and the company growing (shrinking now) Steve has continued his same performance.  He still has an immense love of the company.  But it seems to have lost its luster.  This years event in Atlanta as has become custom the performance made it to YouTube.  Despite best efforts as I am told by Microsoft to stop this.  The CNBC team even commented how lifeless the audience seemed to be in watching their CEO.  I can suggest a couple of reasons.  In the early days when Steve was out high fiving and yelling, most of those sales reps he was slapping hands with were people he had met and often had been on sales calls with them.  There was areal personal connection between Steve and the sales force.  Second most of the people who attend the sales summit’s these days are new hires.  The summit is the first time they have ever seen Steve in person.  Finally the overall event has lost its innocence and feels just like a big corporate sponsored event.  I don’t view this as a negative it is something that just happens when a company goes from 7500 employees to 90,000 employees.

We often say that corporate executives live in ivory towers and have lost touch with what is happening on the ground floor.  I think that has happened to Steve as much as he would fight against me saying that.  However that has not dimmed his enthusiasm for the company.  When the whole Monkey Boy thing came about I remember Steve Saying at eth corporate meeting, “I may be monkey boy!  But I’m your monkey boy!”  Yes Steve you are and you always will be.

Good Night and Good Luck

Hans H Hoffmann July 27th 2010

“The future comes slower than we think yet change happens quicker” – Bill Baker, then at Microsoft.  I remember Bill Baker from his days at Microsoft.  He was the business intelligence guy Microsoft recruited from Oracle.  However this particular blog will not be about business intelligence but about the coming era of  cloud computing and the opportunities and challenges it will present to Microsoft.

The idea of the cloud is not something new.  To Bill Baker’s quote it has been envisioned for some time, it has just been slow in coming..  A lot of industry veterans will talk about the early IBM visions of a “psuedo” cloud idea, but that was from a time when the mainframe was king and we did not have browsers but terminals with green screens.  The dotcom era was filled with these type of visions as Application Service Providers (ASP) were all the rage.  I spent a lot of time on planes flying around to meet these young start up’s with big visions.  The problem was the technology was not there yet nor was the band width. This is all in line with the future comes slowly.

Now we enter a time where we have the bandwidth and we have the technology, not to mention we have a generation of end users who spend their days in a web browser.  Before I was let go at Microsoft the economic downturn was enabling a lot of companies to look at cloud platform solutions.  Tight pocket books will cause business customers to always listen to reps and seek out companies who claim they can save them money.  Another big factor is the developer.  As I said in my last blog quoting Boris, “75% of all development is web development”.  This focus on the web by developers has led to advancements in what is capable from an internet app.  When you look at the web today delivering things like Google Apps, SalesForce.Com, Maps – there was a time these type of rich applications were believed to only be possible by leveraging the power of the PC and the desktop OS (Windows).  If you underestimate the web, you rick irrelevance.  Change happens quickly.

The Microsoft Cloud got off to a bit of a rocky start when it was announced at the Microsoft Professional Developers Conference in Los Angeles in the fall of 2008.  This was Microsoft CTO’s Ray Ozzie first big splash since Bill Gates had stepped down to focus on his charitable foundation.  The argument for cloud computing was simple – offload your infrastructure so you can focus on providing business value to your internal customers.  The Cloud would provide developers a set of API’s they could write to.  The developers could then deploy their applications without having to deal with the IT people (I presented this once to MTV in New York and you should have seen the developers eyes light up when the realized they would not need the admins to deploy).  At the time I was in the Developer Platform and Evangelism division, so this was a big announcement.  Ray’s session went well until the name was announced.  Ray announced the name would be “Azure”, pronounced “Aaa-zure”.  What followed was kind of humorous in a scary kind of way.  I think on our office for the rest of the month we all discussed how to pronounce Azure.  In technical terms that is not a good thing.

Microsoft announced its quarterly earnings yesterday which broke all records coming in and $16 billion.  Yet the stock has remained flat despite these earnings just as it has for the last 7 years.  the problem with the earnings is not the number.  It is where the number came from: Windows and Office.  The same cash cows thaT have always carried Microsoft to new heights. In addition these two products are being sold the same way they have been sold for the last 20 years, primarily through the OEM channel and large Enterprise Agreements. But where is the next big revenue growth coming from?  Well Microsoft says it’s going in large part be its cloud computing platform, Azure.  Assuming that is true the next big step for Microsoft will be transition revenue streams from a paid license model to a subscription based service.  Can both exist together?  Perhaps in the short run, but in a world of universal connectivity it is not hard to envision a world where you receive software as a service, when you want it, how you want it.  We are nowhere near the inflection point on the classic hockey stick for Cloud Computing.  The revenue for Microsoft needs to grow in a way that it does not cannibalize existing revenue.   We see today web-based apps like Google’s Apps that could start to take revenue from Microsoft Office (Microsoft has responded with Office Online).  The effort to create a browser-based OS (like Chrome) could start to change the Windows license model and revenue streams.

With all the recent cloud announcements from a variety of companies from Rackspace to Amazon the field is becoming crowded.  It is still very open, though Amazon has received a lot of the early accolades at the end of the day it is a relatively new space for Amazon and there are companies entering (including Microsoft) that have years of experience supporting both small business and fortune 1000 companies.  This area represents a lot of opportunity and something Microsoft is banking the future on (along with Windows 7 phone, but that is another story).  Microsoft has some of its smartest people behind this and some of their best technical luminaries. The cloud is coming after many years of predicting the future and that change will happen quickly.

Good Night and Good Luck

Hans H Hoffmann July 23, 2010 Phoenix, Arizona

Anyone who has followed Microsoft as a company would know that probably the biggest reason for its storied success is not the Windows operating system, but the ability of the company to get developers to write applications for the platform. At the end of the day it’s not what end users do within Windows but it’s the applications that they use that run on Windows  that make day-to-day life easier and more productive, that is the value of Windows.

The history of the developer and Microsoft is a colorful one.  It is one I have been around for the last 20 years.  When I first started at Microsoft the idea of Object Oriented Programming was just starting to surface.  Just not yet at Microsoft.  We were still shipping Basic 7.0 and C 6.0.  We had a Fortran, Cobol and Macro Assembler.  The company that was setting the development world on fire was Borland, lead by the charming and belligerent Frenchman Phillipe Kahn.  They were at the time possibly the biggest threat to Microsoft.  I remember at my first company meeting in th e Kingdome Bill saying that for a short period had Borland played their cards right they could have started defining some of the API’s in Windows.  As was so often the case Microsoft competitors at the time rarely could see very far and usually fell on their face.  Not long after Microsoft would launch C/C++ 7.0 and Visual Basic 1.0 and all would be good again in the developer world.

When we launched C/C++ I remember attending a Product Manager session where he equated a presentation on C/C++ to watching paint dry.  It was probably true but I did learn how to write “hello world” in C++.  The other thing about the product was the box it came in was huge.  It was a bunch of disks with about 100lbs of books.  It was a workout just to haul it to your car. 

Not long after the introduction of C/C++ 7.0 Microsoft would launch Visual Basic 1.0.  This was a big deal for developers and even as someone who was new to computing at the time this was something I could understand.  If you have to create the same object over and over again, why not create a template (or object) where all you do is settings (object size, line style, color, fonts etc..) .  You still had to write code around these object but in theory you would write less code, in particular that mundane code you wrote over and over again.  The developer could focus then on the truly creative stuff.  Visual Basic would be a huge success and lead to follow up releases and a ton of 3rd party add ons for VB, thus creating a new industry.

The first big change in development took place when Sun Microsystems release Java.  Sun to their credit saw that the development world was becoming one that wrote to Windows and they set out to stop it with the release of Java and the Java Virtual Machine (JVM).  The theory behind the JVM is it would talk to the underlying OS (Windows and many flavors of Unix), the developer would just write to the JVM and not worry about the OS.  In theory nice but the problem is Operating Systems are always being upgraded and therefore instead of write once run everywhere it became write once and debug everywhere.

The second big change and it was a big change was the Internet.  The reason was you view the content on the internet through your browser, not the operating systems.  What does this mean?  To write an internet application you do not need access to the WIndows API’s.  The Windows API’s are not as important as they used to be.  In fact today about 80% of the Windows API’s are not really used.  I have heard of some people at Microsoft calling this a opprtunity.  I call it a catastrophe.  But in all honesty can anyone imagine starting a business today and not having a web page? a commerce site?

I was in San Jose at a bar once chatting with my friend David, the Cisco Account Exec for Microsoft and the PM for Microsoft C++, we’ll call him Boris.  I remember Boris saying that  the data they had said that 75% of development is web development, 20% is Windows and 5% is other.  At the same time we were seeing a significant uptick in market share for non-Microsoft browsers (Firefox, Safari, Opera etc..this was pre-Chrome).  You were also seeing things like Adobe Flash take significant hold of the market, a technology that was non-OS dependent and could run in browsers that ran on Linux, Windows or the MAC OS.

Another interesting thing was the rise of scripting tools like Ruby on Rails and PHP.  Easy way to explain this is developers who get a degree and learn how to write “proper” code and compile code would never touch this stuff.  However for the guy that wants to pick up a book and build a website..this was the way to go  the last few years of sales calls I did these scripting tools came up again and again.  After I was let go by Microsoft my friend David would call and say he talked to a bunch of “scripters”, he could not bring himself to call them developers.  They don’t know what a compiler is.

Finally in my last role at Microsoft selling development tools it was increasingly apparent we were not taking share from our competitors and getting them to move off of Java.  We were simply trying to up sell our customers on the latest licensing scheme.  There was no effort from a sales and marketing standpoint to go after competitive platforms.  We did do programs to go after the weak companies who were being sold or in danger of bankruptcy (Borland, Mercury etc..).  Go after Open Source tools??…please.

So what is my final analysis?  After all this is the week of the Microsoft Worldwide Partner Conference.  It is apparent based on what I have read that Microsoft wants to regain control of the API’s through its cloud platform Azure.  And to its credit it is doing some cool stuff for consumers by creating the private cloud.  But I will say it is still early and Microsoft is behind in the cloud space to companies like SalesForce.Com, Amazon, Google and Rackspace (I was the account exec there for 6 months during the dotcom days).  From a pure development standpoint Microsoft needs to start fighting the hard battles in particular in eth enterprise wheer Java is king,  They need to figure out how to play and attack Open Source.  Finally Microsoft need’s to embrace scripting technologies rather than tippy toe around them. 

In the end developers go where the market takes them. A few years ago the language Object C was around the 45th most popular language to develop in.  Enter the iPhone and it is now in the top ten,  Similar to the 90’s and Windows.  When Windows took off so did the development languages (VB, VC++ etc..).  If Azure takes off so will Microsoft dev tools but if it is another cloud platform….well that is another blog.

Good Night and Good Luck

Hans H Hoffmann June 15th San Francisco, CA