Status

In case anyone was still keeping up with the implications and consequences of government's ability to broadly disable Internet access to a populace, specifically with respect to what happened during the protests in Egypt earlier this year, the latest news is that ousted President Hosni Mubarak is getting hit with $90 million in fines for having ordered the country-wide disruption. It's not clear that this is much more than score-keeping on the part of his political rivals and unlikely that the decision, if it sticks, will serve as a dis-incentive to other tyrants looking to cut off Internet service; it's only a consequence for them if they lose, and in that case there are probably worse things in store anyway.

That is of particular interest right now with the announcement by Iran's government that it intends to deploy an internal "halal" intranet in its country as a replacement for the Internet, a controlled space in which ideas and communications can be more easily controlled. Tightly restricted connections to the actual Internet would remain for business and government use, but no traffic would flow between the two networks. It turns out that Iran is actually a little late to that party, with luminaries such as Cuba, Myanmar, and North Korea having preceded it into the dual-network arena. Iran is, however, a step ahead with a vow to develop an operating system alternative to Windows (note to Iran: such wonders already exist in the vast reaches of that Internet thing you are trying to get rid of) that would presumably make attempts to circumvent controls even more difficult.

If the effort is successful, it doesn't take too much imagination to envision China following suit. Technically, the Chinese have a both broader and deeper base of talent with which to undertake such an effort, and in keeping with Metcalfe's Law, a Chinese intranet would have considerably greater intrinsic value than anything the Iranian's could put together. On the other hand, China has managed the balancing act between repressive regime and cutting-edge technology-oriented capitalism pretty well so far, and might try to continue on that path so long as it is working out for them.

My view of these efforts is that they are ultimately futile¹, but that is cold comfort for folks who are affected by them in the short term. On the other hand, understanding that these things are coming allows time to plan around them, and Iranians concerned about the future of their Internet access would do well to line up connections with providers who have heavy corporate or government subscriber bases, look into foreign satellite-based Internet service, and/or study up on mesh networking technologies. Knowing how to discretely set a system up to dual-boot might also not be a bad skill to have. Good luck!




¹ There are certain other, more nefarious efforts to control user access and freedom which I think are not so doomed, but fortunately most of these governments do not seem capable of executing such projects... relying, as they do, on a mindset almost entirely antithetical to that of the benevolent enablers who are best at creating such closed systems.

You have probably heard now about the OS X malware going around called MACDefender. It's a replay of an old scam familiar to Windows users where hijacked websites force a download to machines visiting the site, which auto-runs an installer of some sort and, if that is successful, starts telling the user that the machine is infected with something else and that they can pay to get it fixed. It's basically a mild form of extortion. The only new aspect is that this hits Mac OS, and has done so in some significant numbers.

That would be news in and of itself but Apple's reponse, predictably, has been abysmal. At first denying the outbreak entirely, they have belatedly promised a patch at some point for the problem. The delay, denial, and generally unhelpful approach has lead Robert Cringely to state that the real security vulnerability for Macs is not malware, but rather Apple itself.

This feeble response from Apple is nothing new, and I have mentioned previously why I think it is a significant reason they have failed to make headway in the business market. Cringely finds it arrogant, but I think it's simply a difference in perspective: Apple considers itself an artist, and art doesn't require support; art just wants to be free. It was perfect when it left the studio, take it or leave it. I suppose you can see that as a kind arrogance but in my experience it's just how artists are and how art works.

At the end of the day, though, I can't see that it matters much.

I will stand by my general contention that Macs remain more inherently secure than Windows machines. The infection mechanism for MACDefender is almost identical to many modern Windows malware attacks, in that it involves an file that automatically downloads and auto-runs an installer when it does so. The user has a basic line of defense, a prompt to allow the software installation, as with any software installation. The difference with OS X is that, unlike Windows, it requires a password instead of just a click, and it does not condition users to automatically enter that password by throwing similar prompts at them every ten minutes. You pretty much get those prompts when you are installing new software, making a configuration change, or when keychain access is requested. Windows has about fifteen different triggers including such mundane activities as running a disk defrag, or such common ones as installing an ActiveX control.

Cringely ends his article asking why it is that Apple fans remain loyal to Apple when Apple is so rarely loyal to them. For most of them, I think they're buying art. For my part I will say that they generally still produce the safest, most useable tools for my purposes. Factor in a malware attack or seven or ten or a hundred of them, and it's unlikely to change that equation: Windows has the same problem, and Microsoft has evolved an ecosystem to respond to it through practice. Apple may not ever take that step, but even if OS X becomes as riddled with malware vulnerabilities as Windows, all it does is cancel out that variable: the Mac platform is still going to be the more useable of the two.

When you're starting out with next to nothing, 66% is pretty easy to get. If Apple would actually put some focus into that business segment, I have no doubt it could do even better. But that might be a mistake for the company overall. Their core strengths lie in the consumer market, and they are likely to continue to pick up business in the enterprise market without doing a thing, courtesy simply of the increasing consumerization of corporate IT and the de facto descent of purchasing decisions from the IT department down to line of business staff.

It's been a few days since Microsoft announced its $8.5 billion purchase of Skype, and all the relevant punditry has had time to chime in. Of the various "it's brilliant/it's stupid/no it's this third crazy thing" takes, I find Cringely's the most compelling, in which he basically argues that Ballmer overspent for Skype solely to keep it out of Google's hands. This is a story that fits in nicely with the excessive, misdirected, gloom-fueled paranoia which tinges every aspect of Microsoft's perspective on the search giant.

In this story, the ghost of Earnings Seasons Future came to Steve Ballmer one night and showed him a vision of Google acquiring Skype, integrating it with Gmail/Voice and Android and eating the lunch of Microsoft and various dominant telcos all in one fell swoop. Obviously that was scary as hell, so when Ballmer, his pointy nightcap all askew, woke in the morning he threw open the shutters and ordered the nearest urchin in the street to go buy him the largest Skype at the butcher's shop, whatever the price.

Nevermind that Google isn't particularly formidable when it comes to areas outside of search (aside: I'm seeing additional indications of why this is true, and they appear to be systemic and cultural and unlikely to disappear anytime soon); it's very much in Microsoft's corporate DNA to flinch when Google makes a move. Eight and a half billion is a pretty big flinch, but then, Ballmer has a big checkbook to play with.

The outcome of all this psuedo-competition is, as Cringely says, still in doubt, but it doesn't look to me like the purchase of Skype is going to be much more than a somewhat tragic sideshow to the overall tragic theme of Microsoft's downward arc. It's not too late for them to pull out of it, even now; but the Skype deal has finally convinced me that Ballmer is not going to be the leader to do it.

I have posted at some length over the past few years about the need for Microsoft to go out and do something to remain relevant as a market-leader in the technology space rather than clinging to their established, diminishing positions dominating the desktop.

Buying Skype was not what I had in mind.

The market seems to agree this morning, with MSFT down almost two percent at the open. That is a common pattern in acquisitions, the purchaser often being punished while the purchasee (a confusing concept in this case, but as far as the market is concerned, 30% stakeholder EBAY) is rewarded. Still, Microsoft has been in the doldrums for most of the past decade, investors waiting for some bold breakout move where the company uses all those smart people and the big piles of cash it has laying around over there in Redmond to catapult back to the forefront of the tech industry. Clearly, this wasn't the move they were looking for.

I like to try to keep an open mind about these things, but I can't really see how Skype is anything other than another floundering move by an executive suite that doesn't quite know what to do next and has no grand strategy for recovering market pre-eminence. The cynical market view is that it's basically a way of buying cash-flow, and that may be true, but it seems to me more like another Bing: an effort to get into an apparently hot segment (VOiP in this case, search with Bing) without demonstrating any real understanding of that market or how it might leverage or impact their existing strengths.

Maybe I'm wrong and there is a secret plan on Steve Ballmer's desk that uses Skype to revolutionize the rest of the company's offerings. I just don't see it right now. At this point, I would kind of like this assessment to be incorrect; I am getting tired of picking on Microsoft, and when all is said and done they remain an important contributor to the local economy here in Seattle and a source of some stability. It's fun to needle the schoolyard bully, but not the asthmatic kid with thick glasses who pathetically chases the cool kids around the playground wanting to play. Microsoft is starting to wheeze a little.

UPDATE: Todd Bishop points out that in fact, this acquisition is an excellent fit with the Kinect, a surprising hit out of the Entertainment and Devices division. For that matter, there are potential applications with Windows Phone. So there are some synergies available.

I don't see that as a significant move, however, and in fact if that is where Skype is destined to fit into the Microsoft family, I would say they badly overpayed for the capability. CNBC just pointed out that Skype is not a revenue generator either, contrary to what I said above about buying cashflow. So eight billion to buy into a money losing operation when all you wanted to do was hook up Xbox's and handsets doesn't seem like a good deal. A connectivity partnership probably could have been done with Skype as a distinct entity for next to nothing, to the same ultimate effect.

Even if the effort is wildly successful, the best thing it can accomplish is to bring Entertainment and Devices out of the doghouse to start earning its keep. The division is barely profitable as it is. It is extremely difficult to envision a future in which it becomes the savior of the company, no matter how successful the Kinect has been. And I doubt that either the board or the company's stockholders would be content with a Microsoft that decided to focus on gaming and devices to the detriment of servers and desktops.