Visit Your Local PBS Station PBS Home PBS Home Programs A-Z TV Schedules Watch Video Donate Shop PBS Search PBS
I, Cringely - The Survival of the Nerdiest with Robert X. Cringely
Search I,Cringely:

The Pulpit
The Pulpit

<< [ Ignore That Man Behind the Curtain! ]   |  Real Trouble  |   [ Quantum Dilemma ] >>

Weekly Column

Real Trouble: How Reverse Engineering May Yet Kill Real Networks

Status: [CLOSED]
By Robert X. Cringely
bob@cringely.com

One of the key tools for building the personal computing revolution is something we don't talk about so much anymore — reverse engineering. This is the science of copying a technical function without copying the legally protected manner in which that function is accomplished in a competitor's machine or software. Probably the most famous (and profitable) instance of reverse engineering was Compaq Computer's cloning of the original IBM PC. Would-be PC clone makers had to come up with a chip that would replace IBM's ROM-BIOS but do so without copying any IBM code. The way this is done is by looking at IBM's ROM-BIOS as a black box — a mystery machine that does funny things to inputs and outputs. By knowing what data go into the black box — the ROM — and what data come out, programmers can make intelligent guesses about what happens to the data when they are inside the ROM. Reverse engineering is a matter of putting many of these guesses together and testing them until the cloned ROM-BIOS acts exactly like the target ROM-BIOS. It's a tedious and expensive process, and one that can be accomplished only by virgins — programmers who could prove that they had never been exposed to IBM's ROM-BIOS code — and good virgins are hard to find. Reverse engineering the IBM PC's ROM-BIOS took the efforts of 15 senior programmers over several months and cost Compaq $1 million. Such a deal.

Reverse engineering is all around us. Digital Research and Novell separately reverse engineered MS-DOS, in both cases speeding up DOS in the process. Microsoft reverse engineered Novell's Netware client software, too. For awhile in the 1980s, it seemed like the way to do business was to start by copying someone else. Well, those days may be returning, because I heard this week of an effort to reverse engineer Real Networks' streaming video software.

In some ways, this is a return to a 1980s value system. In the 1990s, a different system had become dominant. This is the age of open systems and open standards, or so we claim. For the most part, companies are still founded to build things that are either identical to or interoperate with the products of their competitors. But today there is little need for reverse engineering since the standards and their technical specifications are generally published and available for free. The rise of Open Source software like Linux has, of course, accelerated this trend toward openness. Under Open Source, not only is the specification free, so is the final product. This is the power of the Internet at work, making it more important to interoperate than to dominate.

But if companies CAN dominate, they still will. That's why there is still plenty of proprietary software in the world. Certainly Microsoft isn't sharing any secrets with the rest of us. And though there have been occasional efforts to clone Windows, not much such code has actually appeared. In part, this is because at the core of reverse engineering is the fantasy that two groups of developers might arrive at precisely the same destination — might build products identical down to having the same bugs — based on simply aiming for the same functionality. Right. Actually, the odds are nil of doing a blank sheet of paper operating system that looks just like Windows.

Reverse engineering hardware products means grabbing — as Compaq did — the chance to compete in an established market. The reverse engineered product still has to compete on price, availability, performance, and support. In the software business, though, where everyone has identical (low) manufacturing and distribution costs, reverse-engineering allows not just a chance to compete. It offers the prospect of stealing the entire business. Steal control of a de facto standard and you'll kill the company that used to own that standard.

Which brings us finally to Real Networks, one of the great Internet commercial success stories and a company I think might be in real trouble due to reverse engineering. Founded by Microsoft alumnus Rob Glaser, Real is the dominant player in the emerging market for Internet streaming audio and video, having grabbed market leadership before Microsoft and most of the other industry leaders even know what streaming was. Real's greatest asset is the installed base — 70 million free copies of its RealPlayer client software installed on PCs worldwide. It's this huge installed base that justifies Real's $7 billion market capitalization.

Market cap is one thing, but Real doesn't make money by giving away software. Their money is made on the server side, with 75 percent coming from traditional broadcasters who want to put their radio and TV on the Net. If you want to publish more than a few simultaneous datastreams — if you really want to be in the streaming data business — Real will take LOTS of your money. Their unit of currency is the individual stream and they'll sell you software to run on your server or outsource from you the entire encoding and delivery process using Real's own global server network.

Now all this effort is about to come under attack not by a startup but by a formidable opponent. These are not hackers, crackers, or even a Linux-type group development effort. Mighty Oracle Corporation is working to reverse engineer Real's software. When they are done (notice I didn't say "if they succeed"), Oracle will be able to compete head-to-head with Real for the business of sending streams to Real's own clients. They'll make RealMedia just another data type that can be handled by the Oracle 8I database.

What can Real do? They can go to court, which will ultimately fail. They can compete on price, which means customers will win as well as Oracle, which has other sources of revenue to support such a war. They can start dramatically changing the client software, but that means getting us all to download new clients again and again. Or they can ignore the whole thing.

I think Real Networks is in real trouble. It's far from over, of course, but if I was Rob Glaser, I'd start talking to Oracle about a merger.

Comments from the Tribe

Status: [CLOSED] read all comments (0)