Friday, February 22, 2002
In my last entry here I opened Pandora's Box with respect to what I claim to be the real war--the very real shifting of economic power from the US, and eroding competitive advantage of the US software industry. This entry will flesh-out my thoughts on this important topic.
Situational Analysis. The situation is, in a word, a hairball. Worse, it's a hairball of our own making. Here is how I see it:
- Microsoft's monopoly has stifled the US software industry.
This isn't an opinion--it's a fact that came out of the DOJ vs. Microsoft trial. However, I have opinions about how it came to be, and one opinion is it is not Microsoft's fault. On the contrary, Microsoft is a publicly held company and the company officers have a legal responsibility to protect shareholder value. The manner in which they protected this value was at the expense of any company that challenged what Microsoft perceived to be a market in which they wanted to capture, which, over time, led to their monopoly.
This didn't happen overnight, nor was Microsoft subtle about what they were doing. That they were able to evolve into a monopoly is the fault of the Department of Justice for allowing the situation to reach the point it did.
- UCITA (Uniform Computer Information Transactions Act) has implications that make what Microsoft's monopoly did to the health of the software industry pale in comparison.
I first mentioned UCITA in my 2 January entry here, and followed-up with my 17 January entry, which discusses UCITA ramifications in greater detail, and my 8 February entry in Postcards from the Revolution.
In essence, if UCITA were to pass in its original form the US software industry will not be held to standards of quality that the Uniform Commercial Code requires of all other products. Consumers would suffer, but worse, the US economy would suffer because companies that develop software have no incentive to assure quality. If you look at any company in the technology sector--software, hardware of services--the key to competitive advantage is driven by time-to-market. The pressures are enormous. Put yourself in the shoes of a CEO of such a company - at which point is a product good enough to ship? Not perfect - good enough. Quality almost always loses. Remove legal liability for quality, which UCITA would do, and it doesn't take much foresight to predict that the security vulnerabilities and code defects in software that is shipping today would only get worse.
- One of the world leaders in high quality software is India. How did they achieve this? By espousing the Capability Maturity Model, which was developed in the US with Government funding, and other standards and methods. Why hasn't the US software industry adopted these? Outside of the Department of Defense and the contractors that cater to it, and a few large companies, the US industry cannot be bothered by something that many claim to be a hindrance. All you have to do is go to Amazon and read reviews of the CMM books.
The point is that the US software industry is losing leadership because it does not take quality seriously. If you don't think it can happen take a look at what happened to the US steel, automobile and consumer electronics industry - all world leaders when I was growing up.
- The EU is more than a collection of European countries - it's an economic bloc that uses the same currency and an open trading system among its members. One could say that there is a certain amount of protectionism as well. That's nothing new - Japan's trade practices make it impossible for an outside company to penetrate the Japanese market. The EU could easily go that way too. The EU is also leading in quality initiatives that cover not only software, but services.
- we're in a war, but it isn't a war against terrorism
- our opponents are not trying to conquer us, but they are driven by self-interests, as are we; and that's as it should be
- our [elected and appointed] government allowed a monopoly to become established that has stifled the development of our software industry and potential innovations
- a free market will choose quality and our software industry has stiff competition from India and the EU
- the market is global and we may get locked out of it to a large extent
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