SuitWatch

Weekly views on Linux in Business
by Doc Searls, Senior Editor of Linux Journal

Friday, September 14, 2001 —

There was enough news this week to fill a whole month of most publishing calendars:

• First came the post-LinuxWorld Expo hangover, when the answer to What was THAT? ranged from "The End of Life as we Knew It" to The Recalibration of the World Domination Timeline.
• Then came the announced engagement of two hardware giants: Hewlett-Packard and Compaq -- although the prenuptial terms were like those between two corporate praying manti: the female would consummate the union by devouring the male.
• Finally came news that the Department of Justice, now under the pro-megabusiness leadership of attorney general John Ashcroft and President Bush the Younger, would not seek to reduce Microsoft either to a number of Nanosofts. Nor would it continue to press the bundling charge that was the center of its antitrust case, which was successfully prosecuted under the despised prior administration.

More significant than either of these events, however, was the fact that Dmitry Sklyarov remained under indictment and out on bail after serving three weeks in jail for exercising his rights of free speech in violation of the Digital Millennium Copyright Act, an instrument by which the entertainment industry asserts copyright as property and otherwise constitutionally okay activity as trespass. But I'll hold off on that rant while we review the first two items.

LWE

The most quotably pessimistic view on Linux World Expo comes from a guy I met in the press room who told me he had seen Linus wandering the floor without attracting much, if any, notice. "What do you think he was doing," I asked. "Inspecting the ruins," he said.

And ruins they were. The show was obviously a lot smaller than the last one in New York and the one before that in San Jose. The big booths in the middle were IBM, HP and Compaq, and they looked fine. But those guys put booths in every show they can. The Linux contingency was severely depleted. Red Hat was ithere. So was Ximian. VA Linux, with the SourceForge brand in larger type than its own name, was situated near the entrance. MontaVista was there, with their yellow hard hats. Stalwarts like Perforce, with their little handout wooden airplanes, were there at their usual places along the periphery. Borland had a good-size booth with a lot of activity around Kylix.

But the geek habitats were gone. VA especially kept a low profile. If the Slashdot guys were reporting from the floor, I missed it. Lineo wasn't there at all. Penguin was there, but in somebody else's booth. LynuxWorks wasn't there. Linux Mall, with its Stuff for Sale, was gone.

When the lights dimmed at the end of each day, there were no monster parties to attend. IBM folks said they had spent a "small fortune" on their last one, and didn't want to seem festive while the mass mood was in mourning for countless lost jobs and failed companies throughout the whole tech economy. In fact, the party problem was so severe that Linux Journal's modest little hospitality suite got mobbed by geeks looking for good time on an otherwise dull Wednesday night.

I didn't hear anything especially quotable on the upside, but the consensus was clear: the dot-com crash put the whole tech economy on chemo, and the companies with real businesses were going to come out alright. More importantly, there was a strong sense that the virtues of Linux mapped perfectly to the virtues of resourceful technology and business practices. Linux is cheap, adaptable, useful and uncomplicated by royalty and licensing fees. Those virtues are especially appealing to companies making and selling embedded systems and components. Rick Lehrbaum of LinuxDevices.com (and a regular contributor to Embedded Linux Journal) observed that there were about half as many embedded companies at this LWE, but as a percentage of the total the number more than doubled: from about 10% to about 25%.

HP + Compaq

The romance between HP and Compaq got such bad play that in one day the value of the deal sank from $25 billion in stock to just $20 billion. Still, the combined numbers were worth bragging about. The announcement boasted that the Newer, Bigger HP "Will Have #1 Worldwide Positions In Servers, PCs and Hand-helds, and Imaging and Printing; Leading Positions In IT Services, Storage, Management Software." Combined revenues for the two companies exceeded $87 billion over the past four quarters, which would make the new HP second only to IBM, which had $90 million in sales over the same period. While the company would also have 145,000 employees in 160 countries, you could bet that tens of thousands of positions would be cut, and mostly at Compaq's expense.

In fact, the move on Compaq's part was so existentially bold that it verged on suicide. Because when the deal is done, Compaq as a company will only exist as a "brand" -- like we saw with Netscape after it was bought by AOL (which, by the way, laid off a pile of Netscape and Mozilla people this week as well).

The common wisdom on the whole deal was downbeat. Dan Gillmor of the San Jose Mercury-News wrote, "It's hardly thrilling to be the leader in a market that is dull, nearly devoid of innovation and barely profitable."In the U.K., The Register wrote, "A braver choice for HP would have been to prise its way into new infrastructure partnerships, swallowing a Nokia, or a Nortel. Or even an ARM. But instead of looking forward, HP has looked back, and fallen on an acquisition target that looks agreeably like itself only financially weaker."

But the Linux community was kind of upbeat. When I talked to Linuxcare co-founder Dave Sifry, he said, "Gee, everyone said that there'd be consolidation in the Linux space, but this is a bit bigger than I expected!" And the always-sober Dan Kusnetsky, who covers Linux for International Data Corp. (IDC), said "In the recent past both companies have been looking for ways to lower their overall software development costs by moving to high volume, third-party software. This is quite reasonable. It is quite expensive to be a world-class supplier of operating systems." Dan added that the combined company would be supporting as many as eight different OSes, and offers these predictions:

1. Since Tru64 UNIX is the lower volume product and is tied to Alpha, the best features of Tru64 UNIX will be merged into HP-UX and Linux and then Tru64 Unix will be retired
2. The best features of OpenVMS and MPE/ix will be merged into Windows and then one or both of those operating systems will be retired
3. The combined company will focus on HP-UX for high-end enterprise tasks, Windows for workgroup and desktop tasks, and Linux for Web-centric computing tasks.

This was consistent with what one Linux developer told me, with eager anticipation in his voice: "If the two biggest hardware companies on Earth come down to standardizing everything around Windows and Linux, I have no problem with that at all."

The Dmitry Doldrums

Here are the real questions:

• Do we value the Net?
• Do we care about what made the Net so attractive to business that millions of otherwise sane people made and blew trillions of dollars projecting sick business fantasies on it? And do we want to *really* learn from that experience?
• Do we care about the Net's architecture -- crafted to create, for everybody, the most efficient and pervasive intellectual, financial and convivial commons our species has ever known?
• Do we want to save that free & open commons from the bit transporters and content hoarders who are hell-bent on re-engineering it, both legally and technically, so it looks like a Blockbuster for Everything, with a few Big Boys at the source and a zillion "consumers" using their PCs and TVs like vending machines at the far end of the distribution matrix?

Those are questions that matter. And it's questions like those that had Lawrence Lessig all but chattering with rage when he tried to talk some sense to the very folks who made the Net, when he addressed Linux World Expo in a keynote titled "The New New Old War."

Larry characterized the problem in a North vs. South framework:

Think about this state of California. We who live here in the North believe in the free exchange of ideas. Silicon valley was defined as that space where ideas and people exchanged and interchanged without the strong fear of legal regulation. Innovation exploded because people knew they could take ideas and deploy them without getting a lawyer's permission first. This was an environment that embraced freedom over control. But the Southern part of this state embraces a different idea. They believe culture is property. They believe culture should be owned. They believe that to use their product, you have to drive down to their plantation and ask the master whether permission will be granted. They believe that innovation should be as the plantation owners determine. They believe that developments and new ideas (should be) as they will permit.

There hacker community — which broadly includes the architects and infrastructure-builders of the Net -- has long held the belief that the Net treats problems as obstacles and routes around them. But the Net also exists in physical and legal environments that can close those routes. It is broadly deployed and delivered mostly by telephone companies, and to a lesser extent by competitive local carriers and cable systems. None of these parties were especially interested in the Net and its absence of revenue models before it came along to hijack its pipes and circumvent and tunnel under its protocols.

I'm writing this at the far end of a digital pipe whose owners recently shut down the port on which servers usually run, under the pretext that it helped prevent virus-spreaders from getting on the Net under their auspices. But the unspoken reason was that they are a cable company built for comfort shipping content in the downstream direction, from producers to consumers. That the Net was about symmetrical connections is of no concern to them at all. Actually, it's something of a problem: they don't like it.

At the O'Reilly Open Source convention a few weeks ago, I shared with Eric Raymond some of the feedback I've been getting from folks in the Third World about the first thesis of The Cluetrain Manifesto, which is that markets are conversations. Yes, the feedback says, but they are also something much deeper and more important. They are habitats for *relationships*. My friend Sayo Ajiboye, a biblical scholar from Nigeria, points out that in traditional markets business is far more about relationship than about conversation, and far more about conversation than about exchange. He then points out that in the developed industrial world we operate on the same three levels, but demean relationship when it comes time to make a decision. Then, he says, we default to exchange: we go to "the bottom line." So deep is this default that we don't even think about it. "You'll make decisions based on relationships and *say* it's about the bottom line," he says.

Eric listened to this account and helped me sort out those same three layers of a marketplace, which we (and he) also call a bazaar. Relationship is at the top. And in the context of relationship, sharing and respect and peer review all come into play. Linux succeeded where other forms of Unix are now failing because it works a the relationship level and then adapts extremely well at all three levels to the markets in which people put it to use.

This is anathema to the content hoarders and bit shippers of the world, which are accustomed to thinking about business largely in shipping terms that translate easily to The Bottom Line. To them the Net is yet another shipping system -- one that needs to be tamed and harnessed.

Although I would hesitate to include Microsoft among the Southern Californians to which Larry Lessig referred (and I would give them credit for widening the pipes in both directions in "the last mile" by investing heavily toward that end in cable companies), I submit the company's Hailstorm White Paper as an example of how Industrial Age concepts continue to shape thinking about What to Do With The Net. Here's one telling paragraph:

Microsoft will operate the HailStorm services as a business. The HailStorm services will have real operational costs, and rather than risk compromising the user-centric model by having someone such as advertisers pay for these services, the people receiving the value — the end users — will be the primary source of revenue to Microsoft. HailStorm will help move the Internet to end-user subscriptions, where users pay for value received.

Note the phrase *move the Internet".

That's what we're up against here, and not just because Microsoft is a Big Bad Company. What Microsoft is saying here is typical of a default mentality that abides in all of our heads. It's one that says Business is Shipping.

But the Net isn't just about shipping. It's far more a place than a system. We work on the Net, not just through it.

I've said this before but it bears repeating here: The Net is something we built to embody three principles —

1. Nobody owns it
2. Everybody can use it
3. Anybody can improve it

This doesn't square with patent law, copyright law, digital rights management law ... and least of all with the Digital Millennium Copyright Act, which is the big stick Larry Lessig's Southerners are using to beat us Northerners into shape.

We need a place to start from when we think about the businesses we build, the infrastructure we put together, the laws we make (and break), and the fights we take on. That place is the worldwide commons — the bazaar for everybody — we call The Net.

It's a public place. We can't let private interests take control of it.