Selling crown jewels is really dangerous business

Companies do sometime make bad decisions. One of the worse bad decision it might bet the company on something that did not pay off. It is part of the risk companies take.

However, when it involves selling off part of the business that you are famous and in the lead for because it is dull and to pursue more sexy business that the company is not in the lead, that will not be sound decision. One knows one is doing it if there is a lot of opposition or surprise when one announces the decision. I call this selling off the crown jewels.

So far, of the  three examples I heard of in the tech industry, two failed, and one is not doing as well as it would.

The first example is Marconi. It decided to sell its defense and wireless equipment business to concentrate on the telecommunication business. That was made at the height of dot-com boom and almost tanked the company when it burst.

Today we have the second example in HP. When one thinks of HP, one thinks of its test equipment business mainly, followed by electronic parts business. Computers? Not in a million years. When Fiorina tried to sell off the crown jewel to concentrate on computers. That shocked a lot of people. It met opposition from at least one descendent of the company’s founder. Unfortunately for HP, it happened. Today, we heard that it is throwing away the computer business to concentrate on the IT business. That’s a sad situation for a company that sold its crown jewel. Probably the only lucky thing is the spin out company that got HP’s crown jewels, Agilent Technology, is still a leader in the field.

The example that is not doing that well is Motorola. It’s well known for its semiconductor business. Telecommunication equipment? We know it exists but a world leader? No. After the spin off the business to Freescale Semiconductor to concentrate on telecommunication, Motorola’s finances were up and down. Unlike Marconi or HP, at least it has its high moment when Motorola Razr was the rage and the spinning off of its crown jewels looks like it might be paying off. Today, like the other two, it is a shadow of itself, having split itself yet again and sold the mobile business to Google recently.

The new, diminished HP and Motorola now wants to emulate IBM by concentrating on business computing solution. That field of business computing, i.e., the place I lump consultancy, software writing and large scale computing equipment purchase together, seems to be a favourite dumping ground for companies past its former glory. Incidentally, in case you are asking, IBM did not sell off its crown jewels, it simply lose it to competition.

Much ado about nothing

Yes, so Microsoft changed its boilerplate statements in its SEC filing and the changes removing Linux from the list of named competition on the desktop scene, but is the reaction to it warranted?

Two of my favorite writers on Open Source, Brian Proffitt and Steve Vanghan-Nichols, decided there is a need to defend Linux on the desktop. Me? Don’t really think so.

First of all, look at the posting by Ed Bott about the changes in the statement. It looks like Microsoft decided to rewrite the boilerplate. The first paragraph can be read as victory over Linux, but As Brian Proffitt carefully point out, and as I believe that newly reworded first paragraph still referring to the desktop operating system market, the competition from Google on the desktop can be read as in the form of Chrome OS, which itself is a derivative of Linux. I believe Microsoft decided to throw away the generic term ‘Linux’ here and carefully select a real competitor that it can fight against, that competitor is unfortunately the same one that it had been fighting against already: Google. Moreover, that saved them the need to explain what Linux is. I still remember the ‘Linux is derived from Unix’ generated a lot of heated discussion when it made it to the SEC statement.

Is Linux still a competition to Microsoft? Simply because it was not mentioned explicitly does not mean it had gone away or is no longer a threat. In my view, Linux on desktop use has stabilized.  and perhaps this is the reason why Microsoft did not think it deserves a mention. Unlike Google or Apple which are making a lot of hot air (so far) that attract attention to them, Linux is the submarine that does not feature in most peoples’ radar. Like a submarine, a disruptive move can bring it back up to the surface as a significant force to content with. Chances of this happening, compared to Apple and Google’s PR backing, is not that high, unfortunately. I believe that is why Microsoft had chosen not to mention it.

The only person who should feel left out is Ubuntu for not making the cut to be mentioned by Microsoft on its new boilerplate statement, even though it is doing quite well.

If we are to make wave of Microsoft failing to mention Linux, then perhaps we should do the same for Mozilla and Opera, as they were also deleted from the statement.

Android just lost its vendor neutrality advantage

News is Google bought Motorola’s mobile phone business. My first reaction is Android wins a little, but is the loser on the long run. One should not underestimate the appeal of the fact that Google did not own a mobile phone business to device manufacturer, as BBC’s Tim Weber noted: ” To handset-makers, Microsoft’s new Windows Phone software will suddenly look quite attractive.”

Where does Android wins? Motorola’s patent portfolio will now be used to defend Android from patent attack. I have no doubt this is part of Google’s consideration when it buys the business. While there is no doubt that in a few years, Google will built up a portfolio of patents to defend Android, but that is not good enough because depends on Android surviving patents attack today. Its competition knows that and that is why they are attacking Android now. What Google seriously lack today is a back catalog of existing patents to defend Android. Nortel patents would be lovely, but Motorola’s will just have to be the consolation price.

Having a handset business also means Google will gain experience and be more closer in touch with the mobile scene. That can be only good for Android.

In the long  run, however, one cannot help but to ask the question: How much will Google be biased towards Motorola’s need when it comes to designing future version of Android? Good business practice, such as surrendering Android to a foundation can help. IBM managed to do it with Eclipse. Right now, it is a dark cloud over other device manufacturers’ head.

Sure, one can argue that device manufacturer can simply fork Android and go their own way. However, the advantage of using Android is co-opetition (cooperate and competition). Going alone means losing the benefit of cooperation to reduce cost.

While it is true that Google’s open source nature makes it easier to adapt Android to the phone, an advantage Windows Phone at present don’t have although we can never say it will never have (or come close enough to it), I have doubt whether this advantage is big enough to offset the worry about Google taking Android into the direction manufacturers don’t like.

The future is definitely brighter for Microsoft Windows Phone future now. How bright will depend on Google’s next move. It better be a smart one.

Final act in the iPhone 4 Prototype melodrama

Looks like the prosecutor of the iPhone 4 prototype leak is going to let the journalist whose house was raided off the hook. The excuse? He might be protected by shield law. That is exactly the excuse we had expected them to use. Of course, they say it in a way that save face for them, using terms like “… Mr. Chen and Gizmodo were primarily, in their view, engaged in a journalistic endeavor to conduct an investigation …”. Since when a suspect’s view influence a prosecutor’s decision on whether they are charged.

Having said that, Everyone, except perhaps the law, got what they wanted from the melodrama: Apple gets to send other journalists a message that it will pursue them if they publish leaked information. Gizmodo gets the publicity it wanted, and we all get a good melodrama. The loser is the law who have to investigate the complaint, then drop it, sending all the tax payers money down the drain. I am not saying the money should not be spent, but if Apple and Gizmodo both back down a bit, we the tax payer would be financially better off.

Great decision to saction unethical behviour. Now can the victims get compensation please?

TheRegister posted that the two solicitors in UK who shake innocent people for money are being sanctioned by the Solicitors Regulation Authority. It is great that the SRA confirms that the two lawyers are behaving badly.

While the punishment looks to be befitting the crime, I cannot help but wonder what the SRA can (or should be able to) do for the victims of the lawyers. Surely they are entitled to be refunded whatever they had be coerced in to paying  and to be compensated for stress?

The Truth? PR stunt ? or sour grape? (updated)

Google blogs that others, particularly Microsoft and Apple, are using patents to attack Android. We all know that Microsoft is doing it openly. With Apple, it is involves with mobile lawsuits that appears more to be targeting anything except IPhone, but it would be fair to characterize the target as Android given the low share of mobile OSes which are not iOS or Android.

Interestingly, Microsoft’s reply choose to carefully address only one of two Google’s attack, i.e., the Nortel Novell [Update 20110805: Three bloggers/authors noticed that this is actually about Novell, not Nortel. One of them, Mary Jo Foley, tweeted that we are more interested in the Nortel sales. Novell is water under the bridge] patent sales. May be twitter’s 140 characters forced a single tweet to cover one attack, but surely our friend at Microsoft can spare the time for a second tweet?

[Update 20110805: Due to my misreading of Microsoft’ tweet, I thought Google waas invited to join the Nortel consortium. So the point below, about Google knowing beforehand that it cannot  win the auction, is invalid. Sorry]

Since Google was invited to join the consortium to bid for the patent, I am sure it knows that it cannot win the auction. Microsoft alone has more money to spend than Google. Add Apple in the mix and Google simply has no chance. One way of looking at it is Google’s strategy is to drive up the cost  for the consortium, then go the antitrust route  to pick it apart by making sure they did not get what they are hoping for, i.e., a potent weapon against any competitor, especially Google.

Equally valid is the Google feels that the consortium is too powerful and DoJ will definitely steps in to amend the deal. If this is the  case, Google joining the consortium does not make sense for Google. At the minimum, that guarantees DoJ will steps in. The formation of the consortium immediate makes Google’s “pre-approval” worthless. To salvage something from this “pre-approval” and the whole bidding process, Google’s best option is to be the second highest bidder. That way, in the unlikely event the consortium falls through, the patents are likely to be offered to it.

So, what is the truth according to the myopic view of one CTRambler? It is a mix of the truth and a PR stunt by a sour grape (Google).

The fact that DoJ chooses to look into the Nortel purchase says that Google’s worry is not unfounded. While DoJ’s decision to alter Novell’s patent deal does not set a precedence, it might be a glimpse into the opinion of the opaque world of regulation.

It’s definitely a PR thing. No company writes a blog post without first consulting PR.

Sour grape? Possibly.

Hot air, real analysis and change in coverage tone at groklaw.net

What’s the different between hot air and real analysis? Mine ranting on this blog is hot air, For real analysis, look somewhere else!

The trigger for this email is the Mueller’s hot air about Google’s patent purchase from IBM. Compare it with Webbink’s groklaw.net analysis. Both see a potential relation between this purchase and Oracle-Google lawsuit over Andriod, but only Webbink analysis points out, very early in the article, that it does not help Google much!

That in return trigger me to talk about the subtle but clear change in coverage at GrokLaw after webbink took over from PJ. PJ’s writing is about passion,  tend to use a lot of words to explain concepts in law to its reader and pull in a lot of references. Webbink writing is very lawyer-like,  straight to the point and with less references. Both are impressive writers in their own rights.

I think we see here the natural progression of a website as its readers matures. I do not think it is intentional, but one can say PJ planted the seed, educating all of us about technology and law. That education pave the way for all of us to graduate to Webbink’s advance course.