In nature big fish eat little fish, but in business the opposite is often true: the small destroy the large.  Small, nimble, clever, aggressive startups with nothing to lose are able to undermine staid, clumsy behemoths burdened by overhead, bureaucracy and legacies.

Hmm. Are we thinking of any small, nimble industry in particular? Of any staid, clumsy behemoth industry in particular?

Clayton Christensen is a student of the rise and fall of big companies, and he’s coined a wonderful phrase to describe the cycle: Disruptive Innovation. He describes it as “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”

In the space of a decade we have seen the digital book industry (that is the small industry you were thinking of, isn’t it?) soar from novelty to dominance, absorbing in the process a far larger publishing business like a snake unhinging its jaw to consume a sheep.

But there’s a corollary to the rule of disruptive innovation, for, after battening on its huge prey, the smaller company itself becomes fat and soft and susceptible to the predations of the next generation of hungry young businesses.

A recent New York Times editorial, Remember Microsoft?, exemplifies the concept. “Technology upends companies in different ways,” itl stated. “It allows new firms to deliver better products and services in a more efficient way; it also creates new goods and services for consumers to want. Eastman Kodak, the fifth-biggest company in the S.& P. 500 in 1975, was almost destroyed by digital cameras and is no longer in the index. General Motors, fifth biggest in 1985, was hobbled by rivals that could make more fuel efficient cars. Microsoft still rules the PC desktop. But that will matter less and less as users migrate to tablets and more computing takes place in ‘the cloud.’”

Which brings us back to e-books. It’s hard to imagine that they may simply be a bridge to a far larger media world, but if Christensen’s theory holds up, a day may come when the hegemony of giants like Google, Amazon and Apple becomes vulnerable to a fast-moving aggressor, and the cycle begins all over again. Don’t believe it? Just yesterday we wrote about powerful new programs like ePub3 and HTML5 that will make e-books look positively Gutenbergian.  Let’s hope we’re all around to see the day.  Or maybe some of us would rather not.

Read Disruptive Innovation and watch the video.

Richard Curtis

If Microsoft keeps introducing the tablet, will they finally get it right?  We’re about to find out. At next month’s Consumer Electronics Show in Las Vegas, MS will present what, by our count, is its fourth tablet.  Not v. 4 of the same tablet, mind you – the fourth of four different machines.

The presentation will be made by MS’s CEO Steve Ballmer, and this time the company does expect to get it right.  The only problem is that another Steve got his tablet out first and has a multimillion unit lead.

Presumably by next month there will be a name for Ballmer’s device. The first, launched about a decade ago, didn’t really have one.  Then came the HP Tablet, released less than a month before the other Steve released his, but the HP flopped.  Then came the Courier. Came – and went. In April 2010 Microsoft announced that it would no longer support the Courier.

How will the No-Name differ from its Apple rival?

The device, manufactured by Samsung, is “similar in size and shape to the Apple iPad, although it is not as thin,” writes Nick Bolton of the New York Times.  “It also includes a unique and slick keyboard that slides out from below for easy typing.” It will run on the Windows 7 OS “but will also have a layered interface that will appear when the keyboard is hidden and the device is held in a portrait mode.” One source speculates it will run on something called Windows 8.

The marketing strategy may tilt in the direction of business applications. Has Apple left that niche open? “The company believes there is a huge market for business people who want to enjoy a slate for reading newspapers and magazines and then work on Microsoft Word, Excel or PowerPoint while doing work,” said one observer.

If it feels like you’ve heard this story before, well, you have. Read Microsoft Snoozed its Way through Tablet Revolution.

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by The New York Times.

Let’s see if we have this straight.  According to Inquirer, Amazon has created a free shopping app for iPad, the tablet manufactured by its bitter rival Apple.  And for the name of its app Amazon has picked the pocket of another rival, Microsoft. Is it an Amasoftapp? A Micrappazon? No, it’s Windowshop.

To go windowshopping, you survey product categories on the iPad screen. A touch takes you to the product page where you can browse via audio and video. Touch the item you’re interested in buying and it goes straight into your shopping cart.

Read details in Amazon releases a bookstore app for the Ipad by Edward Berridge

Richard Curtis

Patent attorneys are the ticks of the Digital Age.  After quietly applying for a patent they set up their nest on a tree branch and patiently wait – sometimes for years – until a fat cat walks underneath their perch. Then they drop on their victim’s neck and drain its blood.

Over the years we’ve seen many instances of such ambushes. Remember the outfit that sued Amazon for violating its patent on one-click ordering online? And the suit over the BlackBerry that resulted in a $612.5 million settlement? And we recently reported on a patent filed by Amazon – four years ago but never disclosed until now – for a device that sounds exactly like the Nook e-reading device manufactured by Amazon’s rival Barnes & Noble.

And now comes news of a patent application by Microsoft – #20100175018 if you must know – for something most of us think is as free as the air we breathe. Here’s the description, taken from the filing:

A page-turning gesture directed to a displayed page is recognized. Responsive to such recognition, a virtual page turn is displayed on the touch display… The virtual page turn curls a lifted portion of the page to progressively reveal a back side of the page while progressively revealing a front side of a subsequent page… A page-flipping gesture quickly flips two or more pages.

Yes, it’s the good old-fashioned touch-screen virtual page-turn, the one you use to “turn” the page on such e-reading platforms as the iPad, Stanza and Android. This is according to Rik Myslewski of The Register®. But he is skeptical that Microsoft would take action against those platforms.

Microsoft’s patent breaks new ground with a couple of features.  One is the ability to flip a lot of pages at once (y0u do it by dragging your finger down the right margin, Myslewski tells us.)  The other is extraordinary. “In discussing input methods, the filing notes that ‘sources other than fingers may be used to execute a page-turning gesture.’ Noses? Elbows? If not noses and elbows – what?  We invite you to submit photos (suitable for this family publication) of yourself turning the page of your ebook reader with something other than your finger.

Read Microsoft seeks patent on ebook page flip

Richard Curtis

“America’s dairy farmers could soon find themselves in the computer business, with the manure from their cows possibly powering the vast data centers of companies like Google and Microsoft.” writes Ashlee Vance in the New York Times.

“The rise of higher-speed data transfer networks, however, has given technology companies a chance to move farther from large populations and still be able to get information to them as quickly as they need it. So companies like Google, Yahoo, Amazon.com and Microsoft have been engaged in a mad dash to find spots in the United States that have plenty of electricity and land. As a result, more data centers have been built in states like Washington, Texas, Iowa and Oklahoma. If those locations are near dairy farms, so much the better.”

Are we missing a bet by not setting one up in Washington DC?

Details in One Moos and One Hums, but They Could Help Power Google

RC

Is there an app for We’re Suing Your Ass?

The New York Post reports that the Department of Justice and the Federal Trade Commission are seriously looking into antitrust violations by Apple over its policy of requiring developers to use only Apple tools in the creation of apps.  A similar action against Microsoft ended in a similar unbundling.

“Regulators, this person said, are days away from making a decision about which agency will launch the inquiry,” writes the Post‘s Josh Kosman. “It will focus on whether the policy, which took effect last month, kills competition by forcing programmers to choose between developing apps that can run only on Apple gizmos or come up with apps that are platform neutral, and can be used on a variety of operating systems, such as those from rivals Google, Microsoft and Research In Motion.”

“After years of being the little guy who used Washington to fend off Goliaths like Microsoft, Apple CEO Steve Jobs is about to learn what life is like when the shoe’s on the other foot,” writes Kosman.

We couldn’t have said it better, and we’re not going to try.

Read details in An antitrust app: Apple may be in the eye of regulatory storm

Richard Curtis

I’ve often said that the e-book revolution will not reach its tipping point until there’s a tablet under the arm of every student on campus. Though the Apple iPad is the first significant advance in that direction, however, tablets have been around for about a decade.

The first one I ever saw (pictured right) was made by Microsoft, and it created a storm of excitement with a really slick demo showing doctors making hospital rounds with tablets (they still do – one of the few applications that got picked up) and pianists reading a score on a tablet propped up where the sheet music usually goes.

Year after year I waited for Microsoft’s tablet to sweep the country but it never happened. And now I know why. You will, too after reading a New York Times op-ed column by Dick Brass, a former vice president at Microsoft from 1997 to 2004. Brass describes himself as “the fellow who tried (and largely failed) to make tablet PCs and e-books happen at Microsoft a decade ago.”

Though his piece is ostensibly about how MS dropped the ball when it had a chance to tablify the world early in the new century, it’s really about “why Microsoft, America’s most famous and prosperous technology company, no longer brings us the future, whether it’s tablet computers like the iPad, e-books like Amazon’s Kindle, smartphones like the BlackBerry and iPhone, search engines like Google, digital music systems like iPod and iTunes or popular Web services like Facebook and Twitter.”

What happened? “Unlike other companies,” says Brass, “Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation.” Bizarrely, Microsoft remains one of the world’s leading technological companies, having made a $6.7 billion profit in the last quarter alone. Yet even that may not be enough. “While the company has had a truly amazing past and an enviably prosperous present,” concludes Brass, “unless it regains its creative spark, it’s an open question whether it has much of a future.”

You can read his analysis in its entirety in Microsoft’s Creative Destruction. It may explain why Microsoft’s introduction of the HP tablet early in January – predating the release of the Apple’s iPad by three weeks – seems to have laid an egg. Here’s PC World’s take on it: “The HP tablet is basically a color e-reader running Amazon Kindle software, with few other details besides a sub-$500 price point and an estimated arrival on the market by mid-2010. So disappointing was the release that Microsoft and HP’s shares fell yesterday according to BusinessWeek.” (Another HP tablet is being used by designers on Project Runway to good effect. Check out the HP Touchsmart tm2 tablet PC.)

The sad thing is that the original tablet PC could, with some refinements, have evolved into the gold standard for the tablet. Instead it looks like it’s become the…um…Brass standard.

And yet…Microsoft has a chance to redeem itself with the forthcoming Courier, which Gizmodo leaked just recently. Maybe MS will not only get the tablet right this time, but will find the fire in the belly that Brass says has been missing from the corporate culture. Check the below video (actually a series of videos) and determine for yourself.

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

Can the government break up a colossal corporation simply because it’s colossal? Some people think it can and should. In the photo Google CEO Eric Schmidt doesn’t seem to be too perturbed standing beneath an abbreviated logo. If the company’s operation were curtailed, though, he definitely wouldn’t be too happy. Is a breakup really a possibility?

Joe Nocera, business columnist for the New York Times, thinks it is. Nocera, taking a sabbatical to write a book, has noted a few column ideas he hopes to explore in depth when he returns. Some are more fanciful than others, but about one of them, speculating on whether the government will target Google for antitrust violations, Nocera is deadly serious. “The allegation that a monopolist is using its monopoly power to squelch competition is catnip to trustbusters.” he writes. “It was the basis for the Microsoft antitrust trial a decade ago —and I’ll bet the rent that sooner or later it’s going to be the basis for a Justice Department inquiry into Google’s business practices.”

What exactly has Google done to deserve to be broken up? Nocera quotes Ken Auletta, whose book Googled — The End of the World as We Know It, is published today: “The issue is going to be concentration of power.”

Auletta cites the attempt by the federal government to break up Microsoft, an action that almost succeeded until an appeals court overturned a judge’s decree in 2001. Auletta reminds us that Bill Gates thought his company was a benefactor of humanity, just as Google, whose motto is “Don’t Be Evil”, believes now. (See
A Corporate Colossus That Loves Dogs.)

But is the comparison a fair one? The action against MS stemmed from a single product, the Windows operating system, that was being used to suppress competition. But the products and services offered by Google far more diverse than Microsoft’s, and a number of them, like the Android operating system, offer open platforms.

So? What’s the gripe? That Google is, simply, big? Are the trustbusters thinking of splitting the Googleplex up like phone monopoly AT&T was chopped into seven regional phone companies? Will we have autonomous corporations for gmail, e-books, Chrome, AdWords, Picasa, Android, Blogger, Google Maps, YouTube etc.? Will “Goog” be forced to go one way and “le” another? And does anyone seriously think the sum of the parts will be better than the whole, or that less evil will be done by a dozen separate companies than by one huge one?

Read Auletta’s book to see if he makes his case. And wait for Nocera’s future column to see if he makes his. But while you’re defining colossal, keep things in perspective: Microsoft’s 2008 revenues were over $60 billion, about three times as big as Google’s!

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times

New York Times tech columnist David Pogue gives Microsoft’s Windows 7, released today, a close assessment that MS-watchers will take as a green light, as long as they are aware that the new system carries with it some built-in issues that are inherently Windows-oid.

“Now, Windows 7 is still Windows,” writes Pogue. “It’s still copy-protected, it still requires antivirus software and its visuals still aren’t consistent from one corner to another.

“On the other hand, it’s still Windows in a good way, too, meaning that it’s your ticket to a world of choice — a huge catalog of software and computer options. This Win is a win if you’re in the market for a new machine, or if you’re running Vista now and you’re not thrilled by it.

“Above all, Windows 7 means that Microsoft employees can show up in public without avoiding eye contact. Looks like 7 is a lucky number after all.”

Pogue could have simply said that anything would be better than the Vista OS that 7 replaces, but he went much further, saying that “if the programmers at Microsoft have any strength left at all, they are high-fiving.”

Read Pogue’s analysis here.

RC

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

You can’t attend two circuses with one tuchus.

We cited that Yiddish proverb a couple of months ago in focusing on Google CEO Eric Schmidt’s resignation from the Board of Directors of Apple because of concern that his presence on the boards of rival companies was no longer appropriate.

It might be even worse than inappropriate: the Clayton Antitrust Act prohibits interlocking directorates because they undercut true competition. Google and Apple started out as allies but Google’s expansion into its neighbor’s mobile phone and other domains has created conflicts of interest for both companies.

Now another knot between the firms has been cut, according to Miguel Helft of the New York Times. After Federal Trade Commission chairman Jon Leibowitz rattled his sanctions sabre, Arthur D. Levinson, former CEO of Genentech, resigned from the board of Google.

Leibowitz was gracious in triumph: “Google, Apple and Mr. Levinson should be commended for recognizing that overlapping board members between competing companies raise serious antitrust issues, and for their willingness to resolve our concerns without the need for litigation.”

Helft points out that Google and Apple were originally united with Microsoft as the “common enemy”. But as Google’s expanded, “it began bumping up against the interests of Apple with growing frequency, fraying the ties between the two allies.”

You can read about other ways that the two firms are going head to head in Google and Apple Eliminate Another Tie.

RC

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.