Monthly Archives: June 2006

Taylor Speculation Grows; Another Microsoft Defection to Google

As much as Microsoft would like the story to die, speculation persists about the circumstances under which Martin Taylor left the Redmond campus for the last time.

Conjecture at Mini-Microsoft’s blog suggests that Taylor might have been shown the door for having an affair with a subordinate. Other theories are floated, too, some less plausible than others. Meanwhile, Paul McNamara’s blog at NetworkWorld’s website plays up one of the theories floated on the Mini-Microsoft site, namely that Taylor might have transgressed by coining or endorsing the catchy phrase, “Hey Windows Live! Come pimp my office!

That just doesn’t seem a likely reason for Taylor’s spontaneous combustion. If devising or approving egregiously tacky, insipidly crude advertising prose were grounds for dismissal, most of Madison Avenue would be chronically unemployed.

As inquiring minds continue to dig into how Martin Taylor became a former Microsoft executive, the blogosphere is in a veritable buzz over reports that 15-year Microsoft veteran Vic Gundotra, a general manager for platform evangelism, has agreed to join Google after spending a year working on charitable endeavors. A non-compete clause in Gundotra’s employment contract with Microsoft precludes his joining Google for a year, so Gundotra will help others while waiting for that provision to run its course. His future role at Google hasn’t been defined, but I’m sure they’ll find something for him to do.

Writing in eWeek’s Google Watch, Steve Bryant lists five prominent Microsoft employees who have defected to Google. He also lists Martin Taylor, but only to point out that Taylor left for other reasons and did not go to Google.

Microsoft Shuffles More Executives; No Drama this Time

Now that’s more like it.

Unlike the sudden and unexplained departure of Martin Taylor, which was an atypical personnel move for Microsoft in every conceivable respect, the announcement of several executive reassignments that surfaced this evening makes a lot of sense and doesn’t deviate from the written and unwritten rules of the corporate-communications textbook to which Microsoft’s corporate-image guardians rigidly adhere.

Arrivederci for Avici?

There’s a lot of talk on a Light Reading discussion board that router vendor Avici Systems Inc. is on the verge of losing AT&T/SBC’s future patronage as a customer. Considering that AT&T accounted for 94 percent of Avici’s revenue last year, losing that account also is likely to translate into a slow, painful corporate death, even though Avici does have some cash to burn through before it would have to close shop.

As the telecommunications market consolidates, the same fate is being visited upon purveyors of telecommunications equipment. Avici’s market share isn’t significant enough to draw a buyer, and its technology has fallen behind that of market leaders Cisco and Juniper in recent years. There’s no reason to think a white-knight buyer will save the company.

Like many router startups funded by VCs, Avici’s was hunting the great white whale of networking, Cisco Systems. Only Juniper and Avici have been able to make any sort of dent in Cisco’s business, and now Avici looks to be heading for the industry scrap heap. Unlike countless others, however, Avici at least sold products to customer, generated revenue, and even managed an IPO. It accomplished more than most, but now the end is in sight.

Symantec CEO Says Microsoft No Worry

Almost invariably, published interviews with high-technology CEOs are disappointing. They’re disappointing because the CEOs increasingly are being groomed by PR people and “media trainers” to repeat well-worn cliches and meaningless platitudes, and they’re also disappointing because CEOs rarely tell the truth in public, primarily on the advice of their aforementioned PR handlers and image consultants.

A good example is an interview with Symantec CEO John Thompson that can be found today on InfoWorld’s website. When asked whether he and Symantec are concerned about competing with Microsoft in the consumer and enterprise computer-security markets, Thompson says the following:

“I’m not worried about Microsoft at all. Let’s be clear about that. If anything my focus is on making sure we can deliver the level of innovation and the level of visibility or of capabilities that we always have. And to the extent that Microsoft plays fairly, there is a level playing field and I don’t worry about Microsoft. If they do something that is unfair, clearly we will be watching and I’m sure others will as well.”

Microsoft is synonymous with a lot of things in the software and technology industry. Security is not one of them. And they’ve got a long way to go to demonstrate not only capability, but to deliver and build a reputation of being able to support a vast array of users in that regard.”

First of all, Thompson must be concerned about Microsoft. If he weren’t concerned about Microsoft, Symantec’s board of directors would be wheeling his chair out of the boardroom like steroid-enhanced sprinters.

Come on, John. You’re obviously worried about Microsoft. The Veritas merger, controversial to this day in some quarters, was all about diversifying revenue so as not to be financially cratered by Microsoft’s relentless, iterative advance on Symantec’s core business. Everybody knows that Microsoft, now that it has bought most of the functional pieces and gotten lethally serious about security, will keep pounding on doors and working the channel until it gets its fair share of the market spoils. Some of that share will be taken from Symantec. It’s inevitable, like the sun rising in the east and setting in the west.

Contrary to what Thompson suggests, Microsoft need not have the best products on the market to achieve its security-sector objectives. All it needs is the right pricing, a product that is well integrated with Microsoft application environments, and solutions that are “good enough” competitively to hold its own their own against competing products that will, in most cases, be more expensive. Who’s going to punish Microsoft for helping to drive lower prices and greater competition in the overpriced security market? Consumers and businesses won’t be running to the barricades — or to the feds — to defend the security oligopoly, that’s for sure.

Aside from the blather about not being concerned about Microsoft’s incursion into security software, Thompson says Symantec will follow the competitive example that Intuit established in doing battle with the Redmond behemoth. What? Thompson can’t’ believe that, can he? Intuit is and was a vendor of financial and tax-preparation software and related services. Symantec is a vendor of security and storage infrastructure. Other than its size and marketing prowess, Microsoft didn’t have inherent advantages over Intuit in the market for financial and tax-preparation software. Microsoft’s mandate in that market was neither clear nor authoritative.

In security, though, Microsoft’s mandate is clear and it is compelling. This is a job Microsoft should have done in the first place. Microsoft sells operating systems, it sells application software, it sells messaging (email, IM, voice, video) software, it sells web servers, it sells databases. It should have provided adequate security for these products a long time ago. It has belatedly recognized its responsibility to provide security for its own application environments.

Symantec, like McAfee, made a lot of money from Microsoft’s dereliction of duty with respect to security. Those days coming to an end. Microsoft recognizes that the provision of security for its own products is not something it can or should leave for other vendors to address. John Thompson should be concerned about that, and he’s not being honest with us if he says otherwise.

Southern California Catching Up to Northern California in Tech Jobs

The Los Angeles area always had Hollywood glamor, and now it’s gaining in nerd appeal.

According to the California Cybercities 2006 report from AeA (formerly the American Electronics Association), a trade organization for the high-technology industry, Southern California’s technology industry is nearly as large as Northern California’s. The authors of the report say Northern California employs 439,000 technology workers, versus 418,000 high-technology workers in Southern California.

California’s high-technology employment totaled 904,900 in 2004, down 10,600, or about one percent, from the year before. Job losses in California’s technology industry slowed in 2004, compared to the 67,800 jobs lost in 2003 and the 134,400 lost in 2002. That still totals job losses approaching 215,000 over the last three years for which statistical data is available.

Deja Vu at SGI

In a bid to rise from the ashes of bankruptcy, SGI today announced that it would broaden its product line to provide lower-cost options, including the introduction of an x86-based server.

Said an SGI marketing manager: "Obviously, one of the things we need to [do] is expand our market reach." She added that the new products "are very much part of our path back to profitability."

But haven’t we seen this show before from SGI? If I remember correctly — and, surprisingly, in this particular instance, I do — SGI originally attempted to repel commoditization in the visual-computing marketplace back in the bad-old 90s by joining the league of hardware vendors designing and selling industry-standard workstations and servers based on Intel microprocessors and Microsoft’s Windows operating system.

It didn’t turn out all that well for SGI the first time, and there’s no reason to believe it will resolve itself any differently today, even though they’re using Linux instead of Windows this time around. Some companies, such as Dell, are built to make thin margins on huge volumes of box shipments. Others, such as SGI, were build to charge a premium and reap higher margins for exclusive, research-intensive features and functionality that cannot be obtained from run-of-the-mill workstations and servers.

However, as the industry-standard boxes got faster, better, and "good enough" for a wide range of applications in visual computing, SGI found that its value proposition, and its higher prices, retained appeal for a rapidly diminishing audience involved with increasingly esoteric applications. 

It tried, back in the 90s, to remake itself as a lean, mean operational machine, selling industry-standard machines with a subset of its previous functionality, but SGI wasn’t built to play that game. The result was the perception of competitive capitulation, a damaged brand, and increasing irrelevance. It’s difficult to envisage how it will turn out any differently this time.

If the definition of insanity, according to Ben Franklin, "is doing the same thing over and over and expecting different results," then it’s time to summon the doctors in the lab coats to a former star of the technology firmament based in Mountain View.

New Boss, Same Fuzzy Strategy at Novell

As we suspected in our earlier post on the executive-suite overhaul at Novell, not much will change strategically under new CEO, previously COO and president, Ronald Hovsepian.

The company’s strategic direction, which essentially is an accommodation with a dog’s breakfast of products and services accrued through mergers and acquisitions, won’t change markedly. Hovsepian apparently believes there’s nothing scattershot about the current strategy, saying a "narrow focus and energetic push" are all Novell needs to get back on track.

Even if Hovsepian and his team, which will undoubtedly go through some personnel changes, improves the operational and field execution of Novell, it won’t end happily for him or for his company if Novell plots a nebulous strategic course.