Microsoft (MSFT) CEO Steve Ballmer was criticized for failing in markets where the company had been a pathfinder and being unattractive to recent graduates, during a conversation with students at the University of Washington.
Microsoft was an early technology developer in some market segments like tablet computers, interactive TV and digital music players, yet other companies have been more successful in those segments, noted Ed Lazowska, chair of computer science and engineering at the University of Washington, who moderated the conversation.
Ballmer defended the company's track record. "There are plenty of areas where we've been first and have had clear success," he said.
But he also admitted that some other experiences offer lessons. "Probably the lesson or reminder is in a sense success in a commercial sense or in an adoption sense requires doing a lot of things right," Ballmer said. The innovation, delivery model, hardware, software, services, branding and timing all must be right in order to be successful, he said.
"There are cases where that went brilliantly and cases that we're working on," he said.
Microsoft, and other companies, face similar balancing acts when trying to decide whether to invest in new products or invest in products that will compete with others already in the market.
"Everything's a set of judgments," Ballmer said. It's a matter of trying to predict how the market will react while timing development correctly, he said. Doing so requires agility so that a company can assign resources appropriately. "I wouldn't say we have 100 percent fluidity to switch things around on a dime. We have to decide when to build new expertise and what expertise to build," he said. "There's not a science to it. There's no formula that says spend x percent on y."
Perhaps it was the sense that Microsoft is getting that wrong often enough that prompted one student to ask Ballmer to comment on perceived recruiting problems that the company has compared to other companies that are thought to be developing more cutting-edge technologies.
Ballmer denied having recruiting challenges, saying he thinks the company does a good job attracting the best and brightest people. When Microsoft is competing with another company for a worker, it wins 50 percent of the time that the recruit gets dual offers, he said.
Based on the quality of work, excitement level and the chance to do interesting work, "we're right up there with anyone on the planet," he said.
While Microsoft may not have the perceived excitement as some other popular technology companies, it still draws the most computer science graduates of any company from the University of Washington, Lazowska said. Every year around 30 people with bachelor's degrees in computer science from the university take jobs at Microsoft, he said.
By Nancy Gohring
Wednesday, October 27, 2010
The great-grandfather of open source
While in Europe over the last few weeks I thought a lot about Henry Clay (right, from Wikipedia).
I thought about him because open source is basically shared infrastructure. Clay’s “American Plan,” a system of tariffs and central banking aimed at building “internal improvements” like canals and railroads, represented shared infrastructure in the 19th century.
Open source isn’t socialist, and it isn’t communist. The idea of shared infrastructure is 100% American, it is nearly as old as the Republic, and its founding father is Henry Clay.
I should note there are American conservatives who hate Henry Clay specifically because of this program. The Mises Institute calls him a “national socialist,” and says conservatives are wrong to embrace him.
But I’m quite happy to. The question of whether infrastructure should be shared is an important one, a very old one, and a very American one. It comes down in the end to whether there is enough capital around to enable a fully competitive solution.
We faced this question many times. In Clay’s day it involved canals. Later it involved railroads, then electricity and phone utilities. Most recently it involved cable TV and satellite launches.
The answer Americans came to was always the same. Build it, then regulate the market so customers weren’t robbed. Regulation could come from the state or the central government.
What distinguishes open source is simply that this shared infrastructure is regulated by contracts, and by transparency. Publishing the code is your assurance its supplier can’t pull a fast one.
Why is shared infrastructure necessary in software? Because complexity eventually requires it.
An operating system like Linux is too large for multiple vendors to maintain separately, competitively. One may have that power (Microsoft, Oracle) but its size, scale, and expense eventually leads to monopoly, unless there is cooperation in the base.
With cooperation in the base, competition is possible higher in the stack. Dozens of companies base their products on code developed under Linux, through Apache, or through the Eclipse Foundation. The result is competition that could not exist otherwise.
It’s a Moore’s Second Law phenomenon. The first chips were cheap to make. But as they grew more complex, capital requirements squeezed out competitors. Even AMD now has an outside foundry do its manufacturing.
The same thing is happening in software. Open source is necessary to avoid monopoly. It’s shared infrastructure that gives businesses a level playing field from which to compete on a higher plane.
It’s an American idea first put forward almost 200 years ago by Henry Clay.
Kick off your day with ZDNet's daily e-mail newsletter. It's the freshest tech news and opinion, served hot. Get it.
By Dana Blankenhorn
I thought about him because open source is basically shared infrastructure. Clay’s “American Plan,” a system of tariffs and central banking aimed at building “internal improvements” like canals and railroads, represented shared infrastructure in the 19th century.
Open source isn’t socialist, and it isn’t communist. The idea of shared infrastructure is 100% American, it is nearly as old as the Republic, and its founding father is Henry Clay.
I should note there are American conservatives who hate Henry Clay specifically because of this program. The Mises Institute calls him a “national socialist,” and says conservatives are wrong to embrace him.
But I’m quite happy to. The question of whether infrastructure should be shared is an important one, a very old one, and a very American one. It comes down in the end to whether there is enough capital around to enable a fully competitive solution.
We faced this question many times. In Clay’s day it involved canals. Later it involved railroads, then electricity and phone utilities. Most recently it involved cable TV and satellite launches.
The answer Americans came to was always the same. Build it, then regulate the market so customers weren’t robbed. Regulation could come from the state or the central government.
What distinguishes open source is simply that this shared infrastructure is regulated by contracts, and by transparency. Publishing the code is your assurance its supplier can’t pull a fast one.
Why is shared infrastructure necessary in software? Because complexity eventually requires it.
An operating system like Linux is too large for multiple vendors to maintain separately, competitively. One may have that power (Microsoft, Oracle) but its size, scale, and expense eventually leads to monopoly, unless there is cooperation in the base.
With cooperation in the base, competition is possible higher in the stack. Dozens of companies base their products on code developed under Linux, through Apache, or through the Eclipse Foundation. The result is competition that could not exist otherwise.
It’s a Moore’s Second Law phenomenon. The first chips were cheap to make. But as they grew more complex, capital requirements squeezed out competitors. Even AMD now has an outside foundry do its manufacturing.
The same thing is happening in software. Open source is necessary to avoid monopoly. It’s shared infrastructure that gives businesses a level playing field from which to compete on a higher plane.
It’s an American idea first put forward almost 200 years ago by Henry Clay.
Kick off your day with ZDNet's daily e-mail newsletter. It's the freshest tech news and opinion, served hot. Get it.
By Dana Blankenhorn
Friday, October 15, 2010
Is San Francisco emerging as the next Silicon Valley?
SAN FRANCISCO—San Francisco is enjoying a renaissance as a technology center, as numerous Web and digital-media companies move in or expand in a burst of economic activity not seen since the dot-com boom of the 1990s.
While there has long been plenty of high-tech ferment 30 miles to the south in Silicon Valley, San Francisco itself has traditionally been the region's finance and cultural center rather than a tech magnet. Now, the city is seeing growth from start-ups such as micro-blogging service Twitter Inc. and social-gaming company Zynga Game Network Inc.
Late last month, Zynga announced a seven-year lease for a 270,000-square-foot space in the South of Market neighborhood, one of San Francisco's biggest commercial-rental deals in years.
At the same time, the city's design talent, cheaper office rents and mix of amenities are drawing an influx of smaller tech firms, such as social-gaming start-up Booyah Inc. and help-desk software start-up Zendesk Inc.
"San Francisco is absolutely becoming ground zero for mobile and Web start-ups," said John Hering, chief executive officer of Lookout Mobile Security, a 35-person company that arrived from Los Angeles in January.
It isn't clear how sustainable San Francisco's tech boom is, though, especially since start-ups are by definition unproven. Many of the Web-based ones aren't yet generating revenue, much less profit. And most rely largely on the same cadres of venture capitalists, so if funding dried up, the impact would be widely felt.
During the previous dot-com boom, when San Francisco was sprouting Internet firms such as Pets.com Inc., the ferment spawned tech-filled enclaves before a tech bust in 2000 and 2001 wiped out many of the companies. While the sector has shown fits and starts of revival since then, city officials and entrepreneurs said the current level of tech activity is among the most sustained in San Francisco in a decade.
"After the dot-com implosion, everyone had an alternative" for where to locate, said San Francisco Mayor Gavin Newsom. "Now, jobs are chasing people."
Mr. Newsom said Zynga's new lease is the first in a series of office-space deals with Web companies that he expects to be announced in coming weeks. Overall, there are now some 500 tech companies in San Francisco, according to the city's Office of Economic and Workforce Development, which began tracking the number of local tech firms last year.
The activity is crucial for San Francisco, which is projecting a budget shortfall of around $450 million for the 2011-12 fiscal year.
And with the city's unemployment rate at 9.7% in August, tech companies have fueled pockets of job growth, with a 50% increase in the number of software jobs and more than a 20% jump in Internet publisher jobs for the 18 months ended in late 2009, according to Ted Egan, chief economist in San Francisco's Controller's Office.
The influx is also buoying commercial real estate. Tech companies are seeking 1.3 million square feet of space—either to expand or set up shop here— and make up 30% of the current demand for office space, according to Colliers International. Investors are pouring money into the city's start-ups, with venture capitalists putting $528 million into San Francisco companies in the second quarter, more than triple the $164 million in the same period a year earlier, according to research firm VentureSource.
San Francisco now rivals Silicon Valley for hot start-ups, some investors say. "The growth rate of exciting companies is happening more in San Francisco than elsewhere," said George Zachary, a venture capitalist at Charles River Ventures in Menlo Park, Calif. Of the 16 companies he has recently given "seed" financing to, Mr. Zachary said, about 10 are located in the city.
The activity doesn't span all areas of tech; computer-hardware makers still gravitate to Silicon Valley, which has no equal for engineering talent, and start-ups that move north aren't as close to potential partners such as Facebook Inc. in Palo Alto.
San Francisco's tech scene is instead concentrated in a younger generation of smaller, Web-centric companies, especially those in social games and mobile software. Many of these companies require designers, who executives say are more likely to live in San Francisco than in Silicon Valley, especially with the city's mix of advertising, artistic and publishing scenes.
In addition, office rents in San Francisco are cheaper than in Silicon Valley towns such as Palo Alto. Office asking rents were recently $51.48 per square foot a year for full service in Palo Alto versus $32.50 in San Francisco, according to Cornish & Carey Commercial Newmark Knight Frank.
John Ham, CEO of live video start-up Ustream Inc., said he relocated his company to San Francisco from Silicon Valley in May after he was quoted rents in the city that were less than half those in Palo Alto. Armed with $75 million in new funding, Mr. Ham found a 22,000-square-foot office for Ustream to expand in San Francisco and has since beefed up his work force to 200 people from less than 30 earlier this year.
"Entrepreneurs have limited capital and we're getting a real good deal here," Mr. Ham said.
Still, companies such as CloudKick Inc. said they are attracted to San Francisco's amenities, such as better restaurants and public transportation. Alex Polvi, CEO of the 12-person Web start-up, was one of several employees who sold their cars after relocating to San Francisco's Mission District last year from San Jose.
"All up-and-coming start-ups I know are up in the city," he said.
By Pui Wing Tam & Nick Wingfield
While there has long been plenty of high-tech ferment 30 miles to the south in Silicon Valley, San Francisco itself has traditionally been the region's finance and cultural center rather than a tech magnet. Now, the city is seeing growth from start-ups such as micro-blogging service Twitter Inc. and social-gaming company Zynga Game Network Inc.
Late last month, Zynga announced a seven-year lease for a 270,000-square-foot space in the South of Market neighborhood, one of San Francisco's biggest commercial-rental deals in years.
At the same time, the city's design talent, cheaper office rents and mix of amenities are drawing an influx of smaller tech firms, such as social-gaming start-up Booyah Inc. and help-desk software start-up Zendesk Inc.
"San Francisco is absolutely becoming ground zero for mobile and Web start-ups," said John Hering, chief executive officer of Lookout Mobile Security, a 35-person company that arrived from Los Angeles in January.
It isn't clear how sustainable San Francisco's tech boom is, though, especially since start-ups are by definition unproven. Many of the Web-based ones aren't yet generating revenue, much less profit. And most rely largely on the same cadres of venture capitalists, so if funding dried up, the impact would be widely felt.
During the previous dot-com boom, when San Francisco was sprouting Internet firms such as Pets.com Inc., the ferment spawned tech-filled enclaves before a tech bust in 2000 and 2001 wiped out many of the companies. While the sector has shown fits and starts of revival since then, city officials and entrepreneurs said the current level of tech activity is among the most sustained in San Francisco in a decade.
"After the dot-com implosion, everyone had an alternative" for where to locate, said San Francisco Mayor Gavin Newsom. "Now, jobs are chasing people."
Mr. Newsom said Zynga's new lease is the first in a series of office-space deals with Web companies that he expects to be announced in coming weeks. Overall, there are now some 500 tech companies in San Francisco, according to the city's Office of Economic and Workforce Development, which began tracking the number of local tech firms last year.
The activity is crucial for San Francisco, which is projecting a budget shortfall of around $450 million for the 2011-12 fiscal year.
And with the city's unemployment rate at 9.7% in August, tech companies have fueled pockets of job growth, with a 50% increase in the number of software jobs and more than a 20% jump in Internet publisher jobs for the 18 months ended in late 2009, according to Ted Egan, chief economist in San Francisco's Controller's Office.
The influx is also buoying commercial real estate. Tech companies are seeking 1.3 million square feet of space—either to expand or set up shop here— and make up 30% of the current demand for office space, according to Colliers International. Investors are pouring money into the city's start-ups, with venture capitalists putting $528 million into San Francisco companies in the second quarter, more than triple the $164 million in the same period a year earlier, according to research firm VentureSource.
San Francisco now rivals Silicon Valley for hot start-ups, some investors say. "The growth rate of exciting companies is happening more in San Francisco than elsewhere," said George Zachary, a venture capitalist at Charles River Ventures in Menlo Park, Calif. Of the 16 companies he has recently given "seed" financing to, Mr. Zachary said, about 10 are located in the city.
The activity doesn't span all areas of tech; computer-hardware makers still gravitate to Silicon Valley, which has no equal for engineering talent, and start-ups that move north aren't as close to potential partners such as Facebook Inc. in Palo Alto.
San Francisco's tech scene is instead concentrated in a younger generation of smaller, Web-centric companies, especially those in social games and mobile software. Many of these companies require designers, who executives say are more likely to live in San Francisco than in Silicon Valley, especially with the city's mix of advertising, artistic and publishing scenes.
In addition, office rents in San Francisco are cheaper than in Silicon Valley towns such as Palo Alto. Office asking rents were recently $51.48 per square foot a year for full service in Palo Alto versus $32.50 in San Francisco, according to Cornish & Carey Commercial Newmark Knight Frank.
John Ham, CEO of live video start-up Ustream Inc., said he relocated his company to San Francisco from Silicon Valley in May after he was quoted rents in the city that were less than half those in Palo Alto. Armed with $75 million in new funding, Mr. Ham found a 22,000-square-foot office for Ustream to expand in San Francisco and has since beefed up his work force to 200 people from less than 30 earlier this year.
"Entrepreneurs have limited capital and we're getting a real good deal here," Mr. Ham said.
Still, companies such as CloudKick Inc. said they are attracted to San Francisco's amenities, such as better restaurants and public transportation. Alex Polvi, CEO of the 12-person Web start-up, was one of several employees who sold their cars after relocating to San Francisco's Mission District last year from San Jose.
"All up-and-coming start-ups I know are up in the city," he said.
By Pui Wing Tam & Nick Wingfield
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