Blu-Ray Religion Lessons Part 3: Remembering Microsoft Chrome

Rob Enderle

For two posts -- I only intended to do one, but the responses have been fascinating -- I've been trying to use the Blu-Ray train wreck in slow motion to help people avoid technologies that couldn't win and to showcase the dangers of becoming too invested in any technology and why analysis should come first.

 

I chose Blu-Ray because it was not an IT technology. I thought this site's readers could step back, see the lesson and not get too tied up in whether they agreed with the example. As it turned out, that wasn't a great assumption.

 

In the end, the feedback has provided better examples of the problems I wanted to showcase than anything I actually wrote.

 

However, for this final post, I'd like to talk about what we actually observed and how it can be applied to internal product development and -- because that seems like what folks want to talk about -- why Blu-Ray is probably obsolete (and that doesn't mean HD-DVD will win, either).

 

The Dangers of Technology Religion


 

If you look at the comments to both pieces, you'll see a lot of folks apparently didn't actually read what I wrote, didn't see what kind of a site this was, and assumed -- because they rabidly supported Blu-Ray -- that somehow I was promoting HD-DVD and being paid to do so, which isn't true at all.

 

Throughout I constantly suggested the problem for Blu-Ray and HD-DVD was the market was about to bypass both and that Blu-Ray either couldn't get to the proper price fast enough and/or knock out HD-DVD fast enough to prevent it.

 

Take a nationalistic view for a moment. At the beginning of the year, Japan had two out of two shots to capture the majority of the royalties associated with this next generation of technology. But I believe the industry is poised to jump to download, which is based largely on non-Japanese technology, and that shifts that country's odds to close to zero.

 

That means the fight itself will assure Japan as a nation loses what could be a lucrative revenue stream estimated to be in the tens of billions of dollars.

 

I've seen fights like this within companies, where two groups will undermine each other and will seem to care more about assuring the other insider loses than whether the company wins. Often, the result of that is the company loses after wasting a ton of resources on infighting.

 

This Blu-Ray-vs.-HD-DVD battle is like that. The two sides should come together because part of something is always better than 100 percent of nothing. But they are choosing to follow the Laser Disk into extinction, denying both companies and their country the related revenues because the two key players can't reach agreement. It doesn't matter whose fault it is, the national embarrassment of betraying their own country in this way should be driving the two sides together, but it isn't.

 

Of course, it is good for the United States, and since that is where I live, perhaps I should point this out less and enjoy it more.

 

Microsoft Chrome Example

 

One of the most disappointing moments in my life was when Chrome failed at Microsoft due to infighting. Chrome -- and there is actually a great book on what happened -- was an amazing technology. Created as a joint project between Microsoft and Intel, it could have formed the foundation for everything from online video, to massive multi-player games, to rich software-as-a-service architectures supporting heavy graphical applications (think of CAD/CAM as a viable hosted service with unlimited processing power).

 

The potential for this technology was greater, in its time, than anything I'd ever seen, but politically it went against the PC- centric beliefs of powerful executives in Microsoft and was killed. (Parts of it live on in Flash).

 

If you had seen how revolutionary the technology was in its time and how it could have transformed the company, possibly single-handedly countering the belief that Microsoft couldn't innovate, you would better understand the massive damage Microsoft did to itself over politics. In a way, Silverlight is the new Chrome, but so much time has been lost in the meantime.

 

I could point to the fact that the PC division at IBM has a better version of OS/2 than the software division did and that it lost out because of politics, or that Siemens, after it acquired ROLM, powered through a politically backed product that failed so spectacularly it set records for red ink. But, you probably have your own examples of why, when these fights occur, an independent, trusted body needs to step in and make a decision based on what is good for the company. Endless fights are pointless in all cases, and generally it's better for the inferior offering to win than for neither to win.

 

Blu-Ray/HD-DVD vs. What's Next

 

If you pick up Popular Science this week, its featured product for movies is not Blu-Ray or HD-DVD, but Vudu, an excellent download service tied to a set-top box that costs about as much as the least expensive Blu-Ray player. It has a good built-in up-converter and reviewers report the result is more than acceptable on HD TVs. With an excellent user interface and 5,000 movies, both for purchase and for rent, it is arguably the best download solution on the market.

 

If you like disks, HD-VMD has just popped up. It's vastly cheaper to manufacture both players and disks than either HD-DVD or Blu-Ray -- initial players are about $150 and the price will drop. It lacks much of a library, but has support from a variety of studios. This would be more like what DVDs did to Laser.

 

Microsoft (HD-DVD), Apple (Blu-Ray), Cisco (neither), Google (neither) and Intel (HD-DVD) are all focused like lasers on download as the next big model and none seems all that interested in Blu-Ray or HD-DVD from a funding or staffing level anymore. Both formats appear obsolete and these heavyweights are moving to download.

 

Wrapping Up: What Should Happen?

 

Both sides of the HD-DVD/Blu-Ray battle should sit down with a trusted arbitrator and present a shared deal to the other to exit the market. The arbitrator would pick the most balanced option that's most likely to succeed and both sides could walk away with close to 50 percent of the available market. It still has a shrinking chance to be lucrative as opposed to their current track, which promises 100 percent of nothing long term.

 

The challenge for you is not which of these technologies to buy, but to avoid this kind of lose/lose situation in your own companies and to stay focused on what is best for your company and not just on who is right. Being right means very little if you are on the wrong side of a layoff or company failure.



Add Comment      Leave a comment on this blog post
Sep 14, 2007 5:23 AM jojo jojo  says:
yeh and u still said the ps3 isnt subsidized in ur previous article... like the hd a1 werent. Reply
Sep 14, 2007 5:32 AM jojo jojo  says:
but i tell you the truth tho rob, tho i dont take you as seriously as i did when i started to read the first article, i did like this one better than the previous 2. much much less biased and its actually realistic. rather than sensationalist. short and presise. and you do make a point and i fully support it. tho i wont say nothing like i take back what i said in the other 2 i do agree whole heartedly on this article. not biased but realistic. good going rob. this is how you should have made the other two. you attacked blu ray but even thou u claimed to not be defending hd dvd u never said anything bad about it like u did blu ray. so toshiba and microsoft trying to shove it down our throats and theyr good but sony is bad and the whole thing. anyways man i do agree this time around...-peacejojo (jay) Reply
Sep 14, 2007 5:43 AM Rob Enderle Rob Enderle  says:
Cool, actually what I'd intended on that earlier piece was to say Blu needed a heavier subsady. $200 is the break point for high volume and the players had to get there to make the numbers the industry needed to move to Blu (or HD) from DVD. Anyway glad you liked the latest piece better. Reply
Sep 14, 2007 6:47 AM Drew Drew  says:
I remember chrome. wow.What you hilight is the decision making process of the power focused rather than technology focused.My first questions being geek are different I ask:"What are technical and business merits of the solution?"Instead of:"How does this affect the power and influence I have?"The later produces a lot of religous fervor based on non-sensical information and FUD.Once again good article Rob there are people who get it. Reply
Sep 14, 2007 6:59 AM Rob Enderle Rob Enderle  says:
Nicely said, thanks for the very nice post! Reply
Sep 22, 2007 2:03 AM Rob Enderle Rob Enderle  says:
Boy on htat PS3 is going to die thing I clearly wasn't clear on what I was saying. I was trying to put down choice and then result. What I'd intended to mean was if they killed Blu-Ray they would also kill PS3 which means they really couldn't kill Blu-Ray. As far as being an HD-DVD fan boy if you read the last piece you'd see that my conclusion was that both were likey to fail and if you are watching Sony they are now hedging by promoting the PS2 heavily again. Not a bad idea if the market buys off on it, as the PS2 is still vastly more powerful in terms of market share and has a stronger price advantage than any of the current generation players. I'm just not convinced you can successfully promote a V2 device after the V3 has hit the market. But it is creative and it could actually work. As far as IT only, I write for both sides and am (I think) the only analyst that does. I origonally forecast BD would win, then switched th HD this year because of unexpected PS3 execution problems, and now believe both will fail and we will mostly be on a download path by the end of next year unless something else changes. Enjoy your PS3. Reply
Sep 22, 2007 2:33 AM Taylor Michael Taylor Michael  says:
Opinionated. That is all this last 3 blogs were about. I do like your analysis before decision approach to problm solving. I'm not going to blindly blast you on every point.You did make a good point in reference to 'green markets' and market penetration. And Sony does need to be more cost conscious in regards to new tech.The PS3 isn't going to die!! It is an amazing system that is going to rule for years to come. Ps3 packs a powerful punch. I can't sit here and let you bash the PS3. You have a lot of opinions mixed with some well timed facts. As for Blu-ray, it has all the market momentum, studio support, CE support, retail support and consumer support. BD isn't going anywhere either. You are such an hddvd fanboy that is all. Your opinionated piece bashes BD and PS3 unfairly. You never say anything critical about your buddies at hddud. You most certainly are a Toshiba disciple that got bored after reading for months all the good news about the BEST hidef format(BD). BD is by far the best format for the lifespan of this new hidef format. We have done our analysis and we have chosen Blu-ray as the best format. Prices will come down considerably as all new tech do. I thoroughly enjoy BD and PS3 as do the majority of the new hidef consumer base (BD sales figures show it). Oh and don't you worry about PS3 anymore. Both PS1 and PS2 sold over 100mil units each, PS3 will be there in due time don't you worry. That is a lot of BD players.My advise is to go back to your IT work and leave our tech alone. We really don't need someone like you in the Blu-ray camp. Try and stick with dvd's, they are more your speed.So long hddud fan boy!!!!As the Soup Nazi would say, "NEXT"Dream Big, Dream in Blu!! Reply

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