18. February 2008 by Martin Suter.

TheStreet.com reported today that a $2b investment from Intel may revive the Sprint-Clearwire WiMAX joint venture.

Can you say déjà vu all over again?

One word: Cometa.

The vaunted joint venture, founded in late 2002 and backed by Intel, AT&T and IBM, with venture backing from Apax and 3i, Cometa had grand plans to roll out 20,000 Wi-Fi hotspots by 2004, so that people nationwide would be no more than a five minute walk from one.

In a Wi-Fi Planet article, one of the founders is quoted as saying: “If we knew all about where demand for wireless broadband access is going to end up, it would be too late to start the company. Clearly, there’s a leap of faith required here.”

In a stunningly prescient comment later in the article, Marcos Lara, founder and managing director of Public Internet Project, points to the failure of wireless Internet access provider Ricochet as a cautionary tale: “My point is, the model for Ricochet was no different.”

Eighteen months later, despite the backing of 3 heavyweights, Cometa quietly fizzled out, closing its doors in May 2004.

But here we are again, with Intel, Clearwire and Sprint trying to drag WiMAX, kicking and screaming, up the technology hype curve to the peak of inflated expectations. But like Groundhog Day, we’ve already lived through this twice already. Maybe the third times the charm, but I wouldn’t bet on it.

It’s not a question of technology, it’s a function of business model.

That’s my .02!

Martin

(martin.suter@iplicensing.net)

Posted in Wireless, WiMAX, Intel | Print | 1 Comment »

18. February 2008 by Martin Suter.

It’s only 849 miles from Redmond to Palo Alto, but that might as well be light years.

An article in today’s New York Times asserts that the biggest hurdle in the integration of Microsoft & Yahoo will be the clash of cultures. I think they’re being politically correct. It’s bigger than that. It’s a religious war.

During the mid-90’s, I was fortunate to have a front row seat as the Internet took off. Whether it was sitting in meetings with Mark Andreesen and Jim Barksdale or sharing a stage with Scott McNeely in front of thousands of fans, it was heady stuff. I spent 1995-97 within the “ABM” alliance (Anything but Microsoft), and bought into the standard Valley exhortations that Redmond represented “the dark side”.

But in late-1997, things changed for me. I joined another early-stage start-up (FastLane), was given a blank sheet of paper, and the vague task of creating a strategic alliance with Microsoft. My first visit to Redmond was in October 1997, and I will admit that the hair stood up on the back of my neck. I felt like an impostor and wondered whether I had really crossed over to the dark side.

As we took the company from zero to Active Directory poster child over the next 3 years, I spent between 2-3 weeks/month on campus, working across the organization. By the time FastLane was acquired in Q3/2000, I was as deeply embedded in the Redmond culture as I had been in the Valley’s just a few years previous. I was able to expound on Microsoft’s position on the DOJ anti-trust lawsuit and its .NET strategy in great detail. I had drank the Microsoft Kool-Aid. Perhaps I had been assimilated.

So what of the Yahoo takeover?

The average Yahoo employee has gotten out of bed every day believing that Redmond equates to the dark side. Their peers, with whom they drink at Gordon Biersch or against whom they play Ultimate, all believe the same thing. They have spent their careers trying to disprove that “Resistance is Futile”. So how do you convert someone for whom the battle has taken on quasi-religious overtones? A more fundamental question is “Should you?”

As I have stated in previous posts (“The Open Source Red Herring”), I have a ton of respect for Microsoft and that many in the Valley hide their motives behind the pseudo-altruistic cloak of “open source”. However, I would also suggest that, perhaps, Microsoft has met its match with the Internet. It’s been difficult to watch from the sidelines, as Microsoft has touted web architectures and web services (.NET) for a decade now. But there has been a tremendous disconnect between its words and its actions in this regard. It’s easy to see why, as the Web is potentially disruptive to its 2 most profitable franchises: Windows and Office.

But unfortunately, when Microsoft takes a close look in the mirror, it must admit to itself that it still struggles to “get” the web. Salesforce.com got the web and the power of SaaS. Google got the web and the power of advertising. Yahoo got the web and the stickiness of subscriptions. Add in Facebook, YouTube, and most of Web 2.0, and Microsoft doesn’t even earn “fast follower” status.

Perhaps its failure, to truly lead on the Web, is cultural and, ultimately, intractable. Perhaps the gravitational pull of the web in the Valley is too strong, even for Microsoft, to try and move it into its Redmond orbit.  Spinning out its Internet properties with some cash, and merging with Yahoo rather than trying to assimilate it into Redmond, may be Microsoft’s wormhole through cyberspace.

The answer may lie, not in bringing the Valley to Redmond, but in carving out a piece of Redmond, and letting it leave home and move to the Valley.

That’s my .02 for today!

Martin

(martin.suter@iplicensing.net)

Posted in Yahoo, Internet, Microsoft | Print | No Comments »