We interrupt this series for.... Microsoft's Educational Hypocrisy

(Sorry to bust up my Firefox series so early... but I can't just leave this alone!)

In an astonishing act of hypocrisy BillG lambasted education in the U.S. on Friday, saying that we had to raise our standards and our commitment to education.

Well, as Jeff Reifman pointed out back in October, this is not the first time Microsoft has been hypocritical about education and their contribution!

What do I mean? Let's pull out the calculator!

Microsoft has not paid WA state $105 million since 2003 by off-shoring their revenue in shell tax-free corporations in Nevada! As Rep. Sharon Tomiko-Santos of Seattle, who sits on the WA House Finance Committee, notes: "One hundred million dollars more for schools could go a long way toward improving teacher compensation, reducing class size, or directing some targeted dollars to those struggling schools and students who might be able to use additional resources." (quote and calculation from Reifman)

If Microsoft just put its money where its mouth is, those schools that BillG characterized as "ruining the lives of our children" would be FIXED -- the problem would be over. Hell, if Microsoft just put their educational marketing budget into improving schools, the problem would be FIXED!

So, what do you say, fellow MS shareholders? Care to ask our corporation to put up or shut up?

Feel free to e-mail me your requests for financial clarity (or an apology) from MS and I'll collate for in-person delivery to Microsoft's finance office in Redmond (I live just down the street).

Part I: Firefox & IE

Today, I'm starting a mini-series of commentaries on the state of the Browser Wars. I've previously reviewed the ongoing battle of IE against the resurgent Firefox, but I think recent developments merit another look.

Security has long been an issue for IE. So MS's recent announcement of IE 7 was designed to blunt the momentum of alternative browsers.

Yet today, I was intrigued to see Mozilla acting with lightning speed against Microsoft's IE7 announcement. Mozilla immediately announced a dot release of Firefox designed to address security. This seems like a demonstration that although Mozilla/Firefox is hardly a corporation, they're successfully playing the strategy and marketing game against a competitor who is paying people to be smarter at strategy and marketing than anyone else.

Seems pretty clear to me that industry observers like C|Net columnist Molly Wood are missing the true story here. Instead of merely fighting off Firefox in the engineering and security department, Microsoft is getting actively bested by Firefox in marketing, strategy, and development. That's kinda scary.

Nokia and Microsoft

Apparently, Nokia and Microsoft are now sleeping together, or at the least they are exchanging vital bodily fluids like compression algorithims, hardware reference guidelines, and the like.

As the news points out, this new deal is one big "boost to Microsoft, which until now has had little success penetrating the mobile handset market." In fact, MS's market share has remained below one percent for years in the mobile phone market.

Obviously, MS was willing to do everything but sacrifice to Satan to get in bed with Nokia. After all, those Scandinavians own one-third of the 684 million-units-a-year handset market.

One just has to wonder what Nokia is really going to gain, or lose from this deal?

Mad at Internet Explorer

So, Stephen Thorne blocks Microsoft IE from his site and his server. What's the big deal?

BillG says that "You can have as many browsers as you want on your PC, just like you can have tons of music players and things like that. So when people say Firefox is being downloaded onto people's systems, that's true, but IE is also on those systems."

Well, as I've said before, Gates and company really don't get the fact that once your product's lead starts to get incrementally eroded, it's a lot harder to regain that ground than it is to regain ground lost in a big firefight (like the Netscape debacle).

The problem is, once you get into Browser Games, your ability to control the market has moved on. You are, to some extent, always playing catch-up from there on in.

More Security, More, More, More!

More on the security and spyware dead horse.

At that same RSA Conference Gates spoke at on Monday, he talked about the anti-spyware stuff MS was providing for free.

But lost in the noise was the fact that MS is actually updating IE! "The update, mainly security-related improvements, would be available only to users of the latest version of Windows -- XP with last summer's Service Pack 2 upgrade, which also came with security improvements to IE 6."

So, basically, all they're doing now to UPDATE ailing products is to patch on massive security updates? Guys, c'mon, whatever happened to actually creating kick-ass products?

Gates at Security Conference

The headline is kind of an oxymoron, ain't it? I mean, the holes built into Windows and Office are perhaps the cause of computer security issues more than any other root cause.

Microsoft fundamentally built software to give people what they wanted -- people just didn't realize that they wanted security at all until it was about 10 years too late. So MS is playing catch-up now.

Of course, underneath this Nuremburg-like defense of "we just build the software that people want" is the overarching moral fact that if you as a software programmer know that secure software is important, and you fail to build it into your product, then aren't you kinda culpable for the results? I mean, look at the Nazi defense -- "we were just following orders" didn't cut it when it came to the results of their actions.

Similarly, it is highly ironic that Microsoft is now bowing over backwards to claim security credentials when these issues wouldn't even exist without their broken-by-design products. (I should say "our", but I'm trying to get away from my hyper-identification with MS.)

Oh, here are the details on the Gates speech at the RSA Conference.

Death of Technorati?

Over on monkey methods, Dave is writing that because of last month's announcement by MS that they will are supporting RSS search, that Feedster and Technorati will die (via Scripting News)

According to the blogsphere then, the future of Technorati and Feedster is a discount acquisition by one of the portals, maybe at the end of this year. Nothing to see here, folks.

But I don't know if I buy it. After all, as rafer points out, MS is offering merely the search of feed metadata, not feed posts. Site content feeds remain tough to locate and maintain -- what MS really needs to do is hire a bunch of content editors to create a overall map of the blogosphere. That's a brilliant idea!

Oh wait, isn't that just what technorati and yahoo have done?

Longhorn WinFS Fumbles

Somewhere on this site, I know I've talked about Longhorn and WinFS delays. But I can't find it... anyone got the link?

Anyway, there's an update. Some open source nut, Dr. Frederick Berenstein, chairman and CTO of Xandros Inc., to be exact -- thinks that Apple and the open source guys might beat MS to the punch with local search. On eWeek this fall, Berenstein was quoted as saying that "It is understandable, given the complexity of Microsoft's vision of the new [WinFS] system that they chose to remove it from Longhorn until it is fully functional. The Linux community is aware of the direction Microsoft is taking and is planning to bring comparable pervasive search capabilities to the Linux desktop."

So, if local search (that is, real rocking local search) hits before MS Windows update does, what does this do to Windows advantage in the market? Some would say not much. Others forecast the death of Bill G.. I don't know what I think yet.

Apache still ahead of Microsoft?

Almost exactly one year ago, development guru John Chamberlain posted an alysis of why Apache had consistently trounced Microsoft IIS during the previous year. He built on this observation by posting stats to this effect on Slashdot, and creating a comprehensive analysis of this phenomenon in which he attributed Apache's gains to:

• Apache becoming more accessible on Windows
  
• security concerns about IIS
  
• more widespread use of Java-based technology
  
  and he later added the following ideas too...
  
• global use of the Internet favors Apache
  
• open-source software is becoming acceptable to corporations, along with the accompanying open source government mandates
  
• the public is becoming more sophisticated
  
• the administrative burdens in Windows are becoming more onerous
  

So what do you think now? Are Chamberlain's reasons still valid? Is Apache still holding its own against the IIS onslaught? I can't see Microsoft conceding the field to some cancerous open source solution, but is Microsoft losing ground, or gaining?

Innovation Overcome by Bureaucracy

The connection between Microsoft and SCO is old news. But the ongoing grief that SCO is giving IBM and other non-Microsoft companies continues apace.

Why hasn't SCO sued Microsoft too, if their code is part of the open source package. Because of that ongoing relationship between MS and SCO.

Why am I bringing all this up? Because it goes to my ongoing point that Microsoft is no longer innovating. Instead, they're trying to find other ways of prevailing in the market place instead of just creating a better product!

MS Accounting: Net Loss

Okay, full disclosure, so I've benefited from Microsoft stock options. I've also benefited from Adobe stock options.

So, I guess it causes me an ethical twinge to discover recently, that if Microsoft had actually used generally accepted accounting practices, they would have declared a net loss of $18 billion in 1998 for Microsoft (Economist link). How did I discover this?

Why, by randomly browsing on Slashdot, of course.

So, we know this about this Microsoft of six years ago. But how is Microsoft doing as far as their current accounting practices? The problem for shareholders (and this includes most employees), no one really knows.

Microsoft Earnings: Signs in the Cloud of Money

Here's the MSFT quarterly report.

Apparently, they're touting Home and Entertainment (Halo 2) sectors as big wins for them, despite the fact that both of these segments are still money-losers in the big picture.

1) That's one interesting take-away -- we're pointing to segments where we're still losing, as evidence of our continued viability. "While Home and Entertainment was profitable in the 2nd fiscal quarter, it will lose money for the remainder of the year, CFO Connors said. The goal for the group is to reach sustained profitability sometime in FY 2007." See News for details.

2) Secondly, as the Chicago Tribune accurately points out, Microsoft net doubled, but the company's sales growth has significantly slowed.

Final Takeaway? MS is healthy, and is beating forecasts. But they've got some stormy waters ahead, and they know it. This may be the spike before the nose-dive.

Microsoft Being Transparent

I was struck by yesterday's eWeek interview with S. "Soma" Somasegar, corporate vice president of the Developer Division at Microsoft.

Back in the day (say, 8 years ago), MS was mostly applying a thin veneer of "Web friendly" or "Web savvy" to their products, their marketing, and their development of developer communities around their products.

Now, however, it seems that Soma -- and others at MS are really ingesting the valuable lessons of the open source world. Soma says: One of the things I have personally learned from the open-source community or movement is transparency. The reason I'm excited about transparency is if I'm a developer what I really want to know is the internals of the system, I want to know when decisions are getting made, I want to know why the decisions are getting made and... that Microsoft can provide a way for me to interact on a regular basis with the product teams that are building the technology... In some sense the thing open source has done very well is having a rich, vibrant community. That's what we've learned over the last three or four years, that having a rich, vibrant community of customers is absolutely critical and is even more crucial in the developer space.

Soma's right -- open source has built a community.

However, Soma is also wrong. Open source is not just about developers contributing to the product, it's also about customers contributing to the product. The majority of developers who contribute to open source ventures are using the product for day-to-day work. That's why they have a yen to fix it. Fundamentally, Microsoft still doesn't trust their customers enough to give customers the power to change things.