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Weekly Column

Taking One for the Team: Microsoft Has to Change and the Departure of Bill Gates (AND Steve Ballmer) Is the Only Way to Assure Their Fortunes. Also, Net Neutrality Isn't What You Think It Is

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

Here I was, barreling along on a column about Net Neutrality when Bill Gates up and announces his departure from active duty at Microsoft. That simply can't be ignored, so I'm off on a sudden change of course. But because I am never one to hold back, take a look further down and you'll find Net Neutrality covered, too.

As everyone by now knows, Gates announced that he was giving up his Software Architect and Research jobs to Ray Ozzie and Craig Mundie, respectively, and would be withdrawing from day-to-day responsibility over a period of two years. (He would, however, probably remain Microsoft's largest shareholder.) These details mean both a lot and very little depending on precisely how they are executed, but generally I think it bodes well for the company.

Microsoft is in crisis, and crises sometimes demand bold action. The company is demoralized, and most assuredly HAS seen its best days in terms of market dominance. In short, being Microsoft isn't fun anymore, which probably means that being Bill Gates isn't fun anymore, either. But that, alone, is not reason enough for Gates to leave. Whether he instigated the change or someone else did, Gates had no choice but to take this action to support the value of his own Microsoft shares.

Let me explain through an illustration. Here's how Jeff Angus described Microsoft in an earlier age in his brilliant business book, Managing by Baseball:

"When I worked for a few years at Microsoft Corporation in the early '80s, the company had no decision-making rules whatsoever. Almost none of its managers had management training, and few had even a shred of management aptitude. When it came to what looked like less important decisions, most just guessed. When it came to the more important ones, they typically tried to model their choices on powerful people above them in the hierarchy. Almost nothing operational was written down...The tragedy wasn't that so many poor decisions got made -- as a functional monopoly, Microsoft had the cash flow to insulate itself from the most severe consequences -- but that no one cared to track and codify past failures as a way to help managers create guidelines of paths to follow and avoid."

Fine, you say, but that was Microsoft more than 20 years ago. How about today?

Nothing has changed except that the company is 10 times bigger, which means it is 10 times more screwed-up.

Microsoft has spent five years and $5 billion NOT shipping Windows Vista. This reflects a company deliberately built in the image of its founder, Bill Gates -- a single-tasking, technically obsolete executive with no checks or balances whatsoever who fills the back seat of his car with fast food wrappers. So Bill has to go, because as an icon, he's great, but as a manager, he sucks.

Part of this is Gates, personally, and part of it is his entourage -- a meritocracy based as much on historical proximity to Bill as anything else. That inner circle has to go, too, and if it doesn't go -- and go immediately -- the required change won't really happen because the one true Bill will just be replaced by a dozen or more Bill clones.

Up to this point, most of the top people leaving Microsoft have gone because they couldn't stand the working environment. Look now for a second bunch of top people to leave because they liked the working environment too much.

One of the two needed components Microsoft has always lacked is professionalism. Ray Ozzie and Craig Mundie, as successful leaders in other professional organizations and supposedly bonafide adults, are supposed to fix that, which they have a good chance of doing if Gates doesn't meddle.

Notice from the announcement that both men are assuming their new roles immediately? If that's the case, what will Gates be doing, then, during that two-year transition? If he's smart, Gates will do nothing at all. The two-year transition is based on his paranoid need to keep his thumb in the backs of both men and be able to return if he chooses to. But while Ozzie and Mundie are each capable of failure, it is important to remember that GATES HAS ALREADY FAILED, so coming back isn't really an option, though he may not yet get that.

If either of the new guys fail, look for Microsoft to again hire from outside, NOT to bring back Bill Gates.

The other attribute that Microsoft has historically lacked is ethics, which also comes directly from the cult of Bill, with its infinite shades of gray. Microsoft has to this point generally thrived by stealing technology from other companies. But now it is at the point where there isn't that much left to steal, so Microsoft is faced with operating in a whole new manner -- actually inventing stuff. This requires discipline -- not just discipline to do the work, but discipline not to backslide and steal a little of this and that when the going gets rough.

In short, for Microsoft to have the barest hope of preserving its monopoly, it has to build a whole new monopoly based on honest, original work devoid of politics, backstabbing, and lies. This means not only does Gates have to go, but for all practical purposes CEO Steve Ballmer should go, too, because he's as responsible as Gates for this mess.

So IF THEY DO IT THE RIGHT WAY, look for Gates to move his office to the Foundation immediately, look for several dozen of his closest and oldest associates to leave the company in the next four to six weeks, and look for Steve Ballmer to leave, too, within a year.

Anything less simply won't work.

Now to Net Neutrality -- what does it really mean and why do some telecommunication providers seem so opposed to it? The answers are neither as clear -- nor as evil -- as partisans on both sides of the aisle in Congress are suggesting. Those opposing Net Neutrality have in mind VoIP, and nothing but VoIP. Those in favor of Net Neutrality seem to think it means equal treatment under the Internet, which it doesn't really. The only thing we can be sure of, in fact, is that Congress doesn't get it and has a fair chance of making it worse.

The U.S. House of Representatives recently passed legislation allowing Internet Service Providers to do traffic shaping, giving some priority to certain types of content, which would presumably be either the ISPs' own content or that of ISP customers paying a premium for such access. The U.S. Senate is considering similar legislation, as well as other legislation designed to do exactly the opposite -- guarantee that all data packets receive equal service. The prevailing assumption, by the way, is that right now all packets ARE created equal, which of course they are not.

The Net Neutrality issue rests, in part, on the concept of the Internet as a "best effort" network. Best effort, in the minds of the Internet Engineering Task Force, means something slightly different than we are being told in the general press. It means that all packets are treated equally poorly in that no particular efforts are made to ensure delivery. The Net, itself, performs no packet life-support function. This is in keeping with the concept of the Internet as a dumb network. So even in cases of transport protocols that DO attempt to perform reliable transport (protocols like TCP), those recovery measures are negotiated between the server and the client, not by the network that connects them, simple as that.

But all packets aren't created equal. TCP packets over longer distance connections, for example, are effectively at a disadvantage, because they are more likely to have data loss and require retransmissions, thus expanding their appetites for bandwidth. By the same token, packets of all types that originate on the ISP side of its primary Internet connection have the advantage of functioning in an environment with far greater bandwidth and far fewer hops. Perhaps the best example of this disparity: packets that pass through private peering arrangements, versus those traveling from one backbone provider to another through one of the many NAPs, with their relatively high packet loss.

This "to NAP or not to NAP" issue has been with us for a long time. Smaller and poorer ISPs that can't attract peering deals with their larger brethren are stuck with communicating through the NAPs, which requires more time and bandwidth to transfer the same number of data packets successfully. This has long been a marketing point for bigger and richer ISPs. But beyond marketing, this disparity hasn't received much public notice. There are many ISPs that have both private peering and inter-NAP connections, yet whether they send a packet through the NAP or not hasn't been a huge public issue. Perhaps it should be. It has certainly been possible for ISPs to pretty easily put a hurt on packets, and they probably have been doing so, though most pundits assume that we are still living in the good old days.

One thing ISPs supposedly aren't allowed to do is to ban packets completely. If they tried that by, for example, restricting all Internet video or VoIP phone service to a particular provider, the courts would fill with lawyers filing Restraint of Trade lawsuits. So the ISPs take the air carrier approach of not denying passage to anyone, but wanting to give priority boarding to their most loyal frequent fliers. That's the heart of their argument.

But the other position ISPs like to take is that of the common carrier, which supposedly doesn't know the difference between one packet and the next, and is therefore not liable if some of those packets carry kiddie porn or terrorist communications. The ISPs, you see, want it both ways.

And they'll probably get it, because they have the lobbying clout.

But it is important to also keep in mind just how much damage there is to be done here. The biggest culprit in terms of sheer volume of traffic is undoubtedly Bit Torrent, but the failure of Net Neutrality isn't going to have much of an effect, if any, on Bit Torrent, because if your bootleg copy of The Sopranos arrives 10 minutes or even 10 hours later, is it going to matter all that much? No.

ISP high jinks will have little impact on video and audio downloads.

They won't have much effect, either, on search, because the dominant search vendor -- Google -- is working so hard to optimize backbone routes that inserting one slower hop at the ISP will probably STILL leave Google faster than everyone else. That's part of the reason that Google has been buying up all that fiber.

Where this Net Neutrality issue will hit home is for Voice over IP telephone service, which becomes pitiful if there is too much latency. That's what this is all about, folks: VoIP and nothing else. The telcos want to use it to keep out the Vonages, Skypes, and Packet8s, and the cable companies do, too. It is a $1 trillion global business, so we shouldn't be surprised that the ISPs will do anything to own it, but it isn't about movies or music or even AJAX apps -- at least, not yet.

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