Dana Blankenhorn

Skype Makes Its Software Insecure

Bans against reverse engineering, like the one recently announced by Microsoft's Skype unit,  are the latest front in the open source vs. proprietary war.

There is little doubt that the law is on Skype's side. As with the whole question of business patents, this is court-made law that legislators are unlikely to overturn. The case is Bowers vs. Baystate Technologies, and it used Massachusetts law to create something like the failed UCITA, legalizing bans.

UCITA, for those who don't remember, was an effort early in this century to impose bans on reverse-engineering under state laws across the country. Activists fought it back. But before they could celebrate their victory, the Court of Appeals for the Federal District, which is generally the high court for patent cases, lowered the boom on everyone. 

When you keep people from reverse-engineering something, you are explicitly preventing them from looking at how it works. You are explicitly preventing them from inventing a way around it.

The Free Software Foundation regularly puts out calls for reverse engineering  and even Linus Torvalds got slapped down when he protested Andrew Tridgell's use of the technique on Bitkeeper. 

But here's the real problem I have with Skype's decision, or any such decision banning reverse engineering of code.

It's a security risk.

Celebrate Sausage

Think of this as Volume 15, Number 45 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Ever make sausage? It's fun. Some cheap pork shoulder, cut it up, throw some spices in there (it likes sage, cumin, salt – feel free to disagree) and run it through the grinder attachment. Put it in the freezer for a few minutes before you grind it, so it won't cook.

(Shown here is V&V Sausage, made by distant relatives of my wife in Cistern, north of Flatonia TX along State Highway 95. Yummy!)

You can make sausage out of anything. I've had vegetarian sausage. You can buy non-animal casing (it's cheaper) and make a day of it.

Nearly every culture enjoys what Anthony Bourdain calls “meat in tube form” because it's such an efficient use of food resources. (Bourdain's favorite is blood sausage – mostly blood with grains and some nasty bits. Done right it's heaven.)

Know something else people all around the world like? Democracy. Representative government. Transparent decision making. All of which, it turns out, have a whole lot in common with making sausage, only you're using human hopes and desires instead of tasty animals and vegetable matter.

While most people love sausage, most claim to hate sausage-making. While everyone claims to love democracy, they also claim to hate the process.

This is what is wrong with America. The process IS democracy.

In the last two years we've had three major episodes of democratic sausage-making in the news, episodes our media has succeeded in making seem so distasteful we've soured on the sausage thus made without even trying it.

These were, in order, the health care debate, the deficit battle and (now) the European effort to get its fiscal house in order.

Why Analysts Never Give Open Source a Break

There's a simple reason why, after 20 years, we still have analysts with big firms who are ignorant about open source.

There just isn't a lot of money in it.

(As always when you see this guy on this blog, I'm going to point you to the wonderful game from the good folks at Hasbro that has taught generations of kids money is just a game of picking cards and rolling dice.)

This is a feature and not a bug.

By its nature, open source reduces distribution costs to zero and marketing costs to near-zero. Even when an open source company has a sales department they're not really selling. They are converting. They are trying to turn people who have already downloaded and started using the software into paying customers. Their success is determined, in large part, by the prospect's success in getting value from the software.

In other words, the stuff sells itself.

Market analysis is not journalism. It's marketing. Analysts look for opportunities on behalf of buyers and sellers in a marketplace. They sell this knowledge in order to build markets. But what is there to sell if buyers can just download the stuff, and sellers are just converting users into buyers?

Long story short, open source is a direct threat to market research. Typical market research processes don't work in the open source market. Sure, you can get gross comparisons of lots of open source projects, to help you decide which one to put your time and money into. For a company of size this is valuable stuff. But the typical “magic quadrant” analysis just doesn't have a market. Sorry.

Rather than acknowledge this reality, firms like Forrester, Gartner and IDC dance past it, or pretend it's not real. They don't train their people to understand open source because there's not enough money in it – for them. So they don't know it. And they probably never will.

Caesar Was the Bad Man

I come to bury Caesar, not to praise him.

Mark Antony's funeral oration in Julius Caesar (whoever wrote it) is one of the great speeches in all of literature. It's designed to twist a crowd against their best interests, to win them to an empire against the republic, by laying a great man's acts for the common weal against the mere “principles” espoused by Brutus and Caesar's other killers.

Julius Caesar was the villain. Antony's speech is a lie. The tragedy of the play is the destruction of democracy at the hands of Antony and Octavius, who would become Caesar Augustus.

So now let me come to the late Steve Jobs, and patents. 

Apple's latest patent, and the words of Jobs in his autobiography, make clear that his corporate aim is to own the smartphone market, through the legal system, for as long as demand for smartphones exists. What Microsoft took from him, through Windows, he bent his last energy to overthrow by having all Android phones ruled illegal, by taking them from the marketplace.

It's a direct assault against the heart of open source. And, I believe, a direct assault against the intent of patent and copyright.

Next Solar Boom Has Already Started

China won the last round, but the great thing about fast-changing technologies like solar energy is that a new boom  is already just around the corner, fueled by growth. 

The National Solar Jobs Census estimates there were over 100,000 people employed in solar energy this August, about half in blue-collar installation jobs, and predicts growth of 34% for the sector next year.

While there are new U.S.-based producers coming on-stream in the next round, like Sunpreme and Stion , American emphasis this time will mostly be on getting costs down toward “grid parity” and financing new business models.

Public markets will be looking to see which companies among a pack that includes Chinese producers such as Hanwha Solar, Canadian Solar and SunPower , or Japanese companies like Sharp, make a breakthrough in the U.S. markets with new designs emphasizing “micro-inverters,” which turn DC power into AC power at the level of the solar panel.

The big name in this business is an American company, Enphase Energy, which has filed papers for a $100 million IPO to fuel expansion, mostly based on a standard called Zep Solar  from a company that closed its first round of funding last year. 

It's true that 2011 has been very unkind to solar investors. The Guggenheim Solar TAN ETF has lost most of its value this year amid brutal price competition, as has the Market Vectors Solar Energy ETF KWT 

But that's a good thing.

Technology follows a natural boom-bust-boom cycle. Lessons are learned, costs are cut, start-ups emerge, all aimed at turning today's fire sale prices into a cost ceiling for the next round of production. Without such a cycle progress stalls.

Growth, meanwhile, continues.

 

 

Occupy the New Center

Think of this as Volume 15, Number 44 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Peter Frase makes a good and important point about the difference between ideology and partisanship.

Elites hate ideology but don't mind partisanship. Popular movements are inherently ideological, but that ideology may or may not be partisan.

At issue here are Occupy Wall Street and the Tea Party. The former is a cry from the powerless. They have no advocate in government save (maybe) Bernie Sanders. (Elizabeth Warren remains outside it.) The latter was created by, funded by, and of benefit to a specific wing of a specific party. It had advocates in government. It has run government for a decade.

The “third wave” of American crises, which I've been thinking about a lot lately, is this. The politic model is of the last crisis. The economic model is that of two crises ago. But the essence of the crisis goes back three generations, a full century.

What's happening today has a lot more in common with the 1890s and 1900s, in other words, than it does with the 1930s, even though the economic model we all use today comes from there. And it has more in common politically with the crisis of the last generation, the Vietnam era, in which the rising tide had to create its own institutional supports, and actually fought the Crisis President (Nixon) as hard as it did the hippies and their enablers.

Or, to go back briefly, the 1960s were an echo of the Civil War, and the 1930s an echo of the Jacksonian era. You might say we're now playing The 1899 Game.

Cloud FUD is Cloud-Sized

Advocates of the old enterprise computing model are trying every type of Fear, Uncertainty and Doubt (FUD) in order to slow the progress of cloud computing.

In a Financial Times story (behind their firewall – get it through Google News) Gartner executives Drue Reeves and Daryl Plummer go on-and-on about the unlimited liability of cloud computing, acting as though if someone pulled out a plug somewhere your whole business could go down.

Reeves, according to his biography, previously worked at the Burton Group, acquired by Gartner in 2010, and before that at Dell and at Compaq. His background is in server computing and security.

Well you may be a big Gartner wheel, Mr. Reeves, and I may be just a reporter, but I got a very simple response to your FUD.

Last Word on Jobs

I've been wracking my brain trying to think of another executive who passed at the absolute peak of his wealth and fame, as Steve Jobs did. This is the best I could come up with -- Irving Thalberg.

Of course even in that case Thalberg had been aced-out of his role as sole head of production five years before his death. (He had suffered a heart attack at age 33 and died of pneumonia in 1937.)  So maybe even that's not a true analog.

But it's true that the studio closed the day of his funeral, just as Apple stores did yesterday in celebration of Jobs. Both Thalberg and Jobs were cultural icons, people who transformed the consumer world (as opposed to the Watsons of IBM, who worked with businesses).

If y'all can come up with a better analog, let me know. Elvis was fading when he passed at ae 42, and Lennon's star was 10 years dimmed when he died at age 40. John F. Kennedy comes to mind, but he was shot -- he didn't die of cancer, age 44.

It's a puzzlement.

Who is Edmund Muskie Now?

Let's play the 1971 game.

Practically since this blog evolved, I have been struck by similarities between our own time and the crisis of my youth. As was true then, a new political order is struggling to make itself heard.

Many in Washington saw the 1968 election of Richard Nixon as conservatism's ultimate triumph. Conservatives, of course, didn't think so. They appreciated the rhetoric Spiro Agnew fed them, but they wanted more. They wanted a complete transformation of society.

That they achieved this transformation is manifestly clear. In the last decade the political assumptions all ran one way, toward the right. The failure of those assumptions to deal with the problems of that decade -- Islam, Katrina, the mortgage mess -- is what set the present era into motion.

President Barack Obama is, in my view, the new Nixon. Nixon's the One was a 1968 slogan, meaning this is the man who will finally break conservatism's losing streak. Oprah Winfrey resurrected that for this President. Conservatives tried to claim it was pure grandiosity, but it was, in fact, merely the call from a generation of outsiders to finally be inside.

But getting inside the tent doesn't put you behind the political wheel. In our system, it just doesn't. The Senate turns over slowly, the Justice Department glacially, and a generation's assumptions can't be overthrown overnight. So liberals today are as disappointed with Obama as conservatives were back then with Nixon.

Meanwhile, the old assumptions die hard. They double down on themselves. The nattering classes still believe that the balance of power remains what it was.

They go about selecting someone to overthrow "the one" with great confidence. It's amazing how, at Seeking Alpha, the site where I now work, they will cackle about their coming triumphs.

Whoever they select, they're certain, will rise to inevitable triumph. But primogeniture reigns. The assumption is that the candidate whose "turn" it is will win, both the nomination and the later election. The idea that they could be wrong never occurs.

How could anyone vote to re-elect Tricky Dick?

So who's Edmund Muskie now?

Parity and Integration Key Solar Terms for 2012

The keys to the solar market in 2012 will be parity and integration.

Parity means cost parity with other forms of energy. There are many ways to calculate it. But you can expect a lot more talk about from manufacturers this year.

For instance, Sunpreme, a new early-stage company in California. They're off-shoring manufacturing to China, emphasizing support from a local government near Shanghai as if to twist the knife in those who are making political hay out of Solyndra. (Want to damn solar? We'll go to China instead. How you like them apples?)

The company uses the brand SmartSilicon, which is pretty stupid given how many other companies use similar marks. In this case, it refers to a process that uses current equipment to deliver a cell at lower cost. A private sector arm of the World Bank is leading the latest $50 million funding round.

Lowering raw manufacturing costs is just one way to lower total costs of ownership, of course. Another way is to integrate inverters with the cell, making them much easier to install. This is the route both Hanwha Energy and Canadian Solar (which despite its name is Chinese) are using.

Now here's a trick question. Given the names of the three companies above -- Sunpreme, Hanwha, Canadian -- where should an American be placing his bets?

Wrong. It's Hanwha, which is using inverters from Enphase Corp., based in Petaluma. Canadian is making its own gear, meaning Chinese gear.

Expect a lot more announcements over this line in the months to come. Just remember those two words -- parity and integration. And note that, while both concepts are fun, they don't begin to compare to an assurance of long-term sales on a production run.

That's what I'll be looking for in 2012 -- contracts. Show me the money.