TomTom, Open Source, Microsoft and Death by Reactive Management - Page 2

Rob Enderle

Sun: Reactive Squared


Sun is a sad case of seeing a train coming and thinking that throwing rocks at the light on the front of it could somehow derail or stop it. In this case, the train was the industry's move to a software-centric model with much lower-cost hardware, and the headlight was Microsoft. Granted, it dented the headlight a lot, but with what appears to be an acquisition by IBM looming for a price that is a small fraction of what it was once worth -- or the alternative, complete failure -- Sun's fate is self-evident. IBM, instead, transformed over the same period into largely a software/services company and is the only large-scale firm that has proven, for now, nearly invulnerable to the economic downturn -- and so is able to buy Sun. IBM focused on where the market was going and thought strategically. Sun on Microsoft and thought tactically and the result is also self-evident.


Obama's Similar Failure


What triggered my thinking was a well-written piece in the Washington Post on the current U.S. administration's response to economic crisis. In the $787 billion package, there is $350 million for auditors and investigators. This is reacting directly to the lack of oversight that created the problem in the first place. But it's contrary to the goal of creating a healthy financial ecosystem. When a person or an industry is sick, the correct process isn't to overwhelm them with monitors so that every symptom can be reported, but to focus efforts on making them well again. What the government is doing is equivalent to locking the barn and surrounding it with armed guards after the horses have run off. What it needs to first focus on is getting some more horses. My own view wasn't that the industry was under-regulated; it was that the regulation and oversight wasn't doing the job.


In this case, the strategic goal is financial health, the tactical is oversight, and right now the excess focus on the tactical may actually prevent the strategic result that is intended. Take a look at the 90 percent tax on bonuses; this is a tactical response to the problem. What should result is that the good people in places like AIG leave and those who can't find employment elsewhere stay. AIG gets sicker and, to save a few million in bonuses, Congress loses billions in wasted recovery dollars. The focus should have instead been on getting rid of the bad employees and eliminating the policies that created the problem in the first place.


Before it is done, this tactical excessive focus on regulation could actually kill the financial industry much like over-medication can kill a person. The Bush administration largely did the same thing after 9/11. The proper fix to prevent similar airline attacks from recurring was to simply change the policy with regard to hijackers and harden the doors into cockpits. Instead, the Bush administration and most of Congress' overreaction did more damage to the economic health of the country and individual freedoms than the terrorists could have ever hoped to accomplish on their own.

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Mar 23, 2009 11:55 AM obvio capitao obvio capitao  says:

TomTom tells Ballmer tear down this wall

By joining the Open Invention Network TomTom made its most important statement yet that it won't get pushed around in its patent litigation with Microsoft.

OIN members include important players like IBM, Philips and Sony. On the other hand they also include Novell, whose original patent cross-license with Microsoft drives the controversy over Big Greens claims to own the Linux operating system.

By joining OIN TomTom lays claim to over 275 important patents and patent applications, at the cost of releasing its own IP to members.

OIN boilerplate is pretty clear on this, saying it is creating 'a supportive and shielded ecosystem to ensure the growth and adoption of Linux.'

It's one thing to intimidate a small company like TomTom, a Dutch maker of GPS systems who press reports say is struggling to survive.

It's another one to take on the OIN and all its members. But given Novell's paid leadership in the OIN group you have to ask whether TomTom didn't also just find a way to finesse this thing if the going gets tough.

Over at Consortiuminfo Andy Updegrove writes that the TomTom legal strategy can be compared with Ronald Reagan's strategy of economic confrontation with another empire.

Just as the iron curtain eventually fell when the illusion of the Soviet economic model could no longer be sustained, I believe that Microsoft's anti-FOSS strategy will eventually collapse as well - not from assault from the field, but due to an uprising from within.

Or, put more simply, Mr. Ballmer, tear down this wall.


Mar 23, 2009 3:54 PM Rob Enderle Rob Enderle  says: in response to obvio capitao

Recall that was said by a very strong US to a weakening USSR.  If this had been said by IBM and not Tom Tom, I think this might play this time.  In this case it would be like Iceland saying this to the US.   If you've tripped fallen and are in the process of dieing it is really hard to get the other guy to take your bluster seriously.  Tom Tom should likely be focused 100% on surviving at the moment and avoiding the declarations of war. 

Mar 24, 2009 12:17 PM obvio capitao obvio capitao  says: in response to Rob Enderle

Except that Andy Updegrove is not TomTom.

Mar 24, 2009 12:31 PM obvio capitao obvio capitao  says: in response to Rob Enderle

Tom Tom should likely be focused 100% on surviving at the moment and avoiding the declarations of war. 

As always, you are promoting Microsoft's agenda...

The reason the licensing question matters is the message that it sends:  Microsoft has for years been approaching vendors alleging that it owns 235 patents that it claims are infringed by popular open source software, and that several dozen of these patents are infringed by any software distribution based upon the Linux kernel.  These discussions are always behind the scenes, but when Microsoft succeeds in reaching agreement with a significant vendor, and especially a Linux vendor (like Novell), Microsoft makes an announcement, and puts another notch in its gun.  The next time it visits a vendor - or even an end user - that list gets to be longer, and the person receiving the next visit is tempted to think that there must be a basis for all those other companies signing on the dotted line.  So, it would appear, the smart thing would be to get in line as well.

Of course, the terms of these settlements are never released - which is an integral part of this type of patent infringement strategy.  In fact, the person visited may not have had to pay anything at all.  Indeed, the balance of value may have been in the opposite direction.  Or the patents Microsoft claims may be infringed by Linux may simply be thrown in along with patents the other party really needed a license for.

All of which puts a vendor like TomTom in a very difficult position.  If it had taken the license Microsoft offered a year ago, then have been added to the lengthening list.  If it settles now, after Microsoft's suit has attracted so much attention, the terms will certainly be kept secret - and Microsoft will then have a notch of real power to add to its gun - it took a vendor to court, and under threat of suit, the vendor buckled.  Surely that must mean that the patents are serious, right?

Well, not necessarily.  Companies settle patent suits all the time for purely economic reasons: it's cheaper to fold then fight, and particularly so if the plaintiff is more interested in being able to say you folded than in any license income.

Now, though, TomTom has added a new dimension to the dispute that changes the game, and allows for multiple possible interpretations of any settlement that may end the dispute.  Without question, the legal basis of the settlement would be a cross license between the companies that allow each company to use a list of stated patents of the other, thus removing the basis for the original suit, and then the second suit.


Mar 24, 2009 6:50 PM Rob Enderle Rob Enderle  says: in response to obvio capitao

But only if they make it to court or through a negotiation.  Right now they are failing.  This all seems to be a huge distraction for them when they should be fucused 100% on making it through the next quarter.   Every time they make the news generally someone says they are going out of business and who wants to buy a product from a firm that is failing?

As to Microsoft's agenda they don't get a cent unless Tom Tom survives and they don't get case law (were they really targeting Linux which is doubtful given Red Hat would be a vastly better target were that the goal) either. 

The press coverage for both companies is hardly positive but Microsoft isn't in danger of closing its doors and Tom Tom's efforts are not only making its survival less likely by focusing attention on their problems they are scaring away any buyers for the firm as well.  

It's reactive and takes focus from where they need it and that is getting their costs in line with crashing revenues before they run out of cash (which may have already happened). 


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