Government Antitrust Litigation Against Intel

Perhaps signaling an increase in antitrust activity by government authorities, several actions have been filed against semiconductor giant Intel.

Last November, NY attorney general Andrew Cuomo started the volley by instigating an antitrust lawsuit against Intel, the first against the company in a decade, according to the NY Times . The Obama administration followed suit . The actions allege that Intel pressured computer manufacturers to avoid competitors such as AMD, and also rigged its micropocessor to prevent Nvidia from providing chips to customers desiring superior graphics capabilities.

According to PC News, antitrust action has drawn "mixed reviews" because microprocessor prices have fallen sharply in recent years .

Interesting article on how difficult it is for start-ups to crack the x86 market of microprocessors here.

DOJ investigating IBM for Antitrust Violation in Mainframe Licensing

The DOJ announced it was investigating allegations that IBM is engaging in anticompetitive conduct by declining to license certain components of its mainframe technology, such as software, to potential competitors. For example, IBM allegedly did not license its software to Platform Solutions, one of several companies working on software to enable smaller servers to mimic the capabilities of mainframes. IBM, of course, denies that its licensing practices are anticompetitive or violate antitrust laws, and the mere refusal to license is usually insufficient to prove wrongdoing.

It is an interesting reminder of how important mainframe technology is, even decades after the PC revolution. According to the NYT, mainframes still comprise 25% of IBM's revenue, and handle 50 billion transactions a day. Indeed, some have noted that the modern "cloud computing" phenomenon is an attempt to recreate the interactivity and functionality of mainframes from the 1960's, when companies remotely used the storage and bandwidth provided remotely by large machines.

Collusion allegations against Apple, Palm (Jaideep Venkatesan)

The stepped up regulatorenforcement of the new regime seems to have settled on a new target - allegations of collusion between Palm and Apple to not poach each other's employees. The allegations are not sourced, and neither company is commenting (nor its seems, is the DOJ), so it is hard to determine the accuracy of the allegations.

Feds May Be Investigating Apple's Request For Palm To Stop Hiring Apple Employees

Microsoft and Google: A Recap (Jaideep Venkatesan)

So much has happened between Microsoft and Google, a recap seems to be in order.

Microsoft launches Bing , replacing its moribund Live Search.

Google announces the development of the Google Chrome Operating System.

Microsoft announces that it will offer a a free online web version of its Office applications, which will compete with Google Docs for hosted software applications.

Note the antitrust issues raised in the Google OS release. The FTC is currently investigating Apple and Google under little-used section 8 of the Clayton Antitrust Act.
Michael Arrington's interviewed Gary Reback , author of the excellent book Free the Market! about his experience in antitrust issues in the technology industry over the past thirty yeares. Arrington and Reback discussed some of these issues. Reback argued that even though the DOJ's civil actions against Microsoft did not result in a concrete remedy, they achieved their purpose by spurring competition among browsers. A large share of the credit for this competition is due Mozilla and its Firefox browser. The New York Times examines the impact of Google's entry in the browser and operating system spaces on the future of Mozilla.

There is also a good analysis of the Microsoft-Google battle in CNN - Google vs. Microsoft: What you need to know.

The upshot of most te analysis is that Microsoft and Google are battling for position on the "webtop", when businesses and consumers move away from locally owned storage and memory to computing on the cloud. While it is not clear how it will shake out for either company, consumers are likely to benefit from increased competition in browsers, operating systems, and web applications.

Financial Reform and Venture Capital (Jaideep Venkatesan)

Last month, President Obama unveiled his plan for financial regulation. The administration's
draft included a provision to bring "private pools of capital" under regulation, potentially subjecting venture capital funds to disclosure requirements, margin and reserve limitations, and other regulations that govern traditional banks and bank alternatives.

Financial reform bringing "shadow banking" under regulation is essential to prevent a replay of the financial crisis of 2008 that froze credit and ushered in the current recession/depression. However, it is an open question as to whether venture capital funds function in a manner similar to banks and pose the same systemic risks if left unregulated.

The National Venture Capital Association wasted no time in opposing the financial regulatory plan. The Association made the boilerplate opposition to financial regulation typical of the Washington Consensus. Given the current plunge in Venture capital funding, poorly designed regulation can exacerbate the economic downturn. Nonetheless, the current crisis requires a financial overhaul, and given the importance of venture capital funding to technological innovation and the economy, it should not be left out of the new financial regulatory regime.

Web 2.0 and the Federal Government (Jaideep Venkatesan)

The Center for American Progress has an interesting report on the Federal Government's potential use of Web 2.0 technologies (defined as free hosted services for posting and sharing content) both for internal government processes and in its interactions with the public. The Report notes the need to update Federal government procurement rules applicable to the software, which predate the internet (much less Web 2.0 technologies). It recommends that the government bridge the tension between encouraging government employees to use hosted services as much as possible with the potential that the government be seen as endorsing certain services without following the strictures of procurement rules.

Web 2.0 Report (pdf)

Oracle & Sun: Concentration in IT (Jaideep Venkatesan)

The reaction to Oracle's acquisition of Sun Microsystems has people buzzing about the potential combination of Oracle's database and enterprise application technology with Sun's hardware expertise (as well as its software innovations such as JAVA). The San Jose Mecury news notes that the acquisition makes sense in light of the efforts by other IT giants such as IBM, Cisco (noted in this post) and HP to acquire smaller companies at bargain prices to expand their product line. Cisco Subnet (a blog serving members of the Cisco customer community) relates that at least one analyst suggests that the merger is good for Cisco, which has partnered with Oracle and generally has a good relationship with Sun. InfoWeek contemplates whether Oracle's acquisition will spell the end of Java, by manipulating the development of a language relied upon by Oracle competitors IBM and SAP.

Cisco Expands in the DataCenter and Consumer Electronics (Jaideep Venkatesan)

Cisco was in the news last week for two ambitious but seemingly disconnected expansions from its core of dominating electronic equipment.

Cisco first announced its entry into server market, offering its first blade servers for Datacenters, many of whom already use Cisco's networking equipment. The server will be part of Cisco's Unified Computing System, which would include a Cisco Switch and third party software, and is offered to reduce DataCenter costs. It is widely seen as a threat to IBM and HP, who have traditionally partnered with Cisco in offering complementary products to its networking equipment, including servers. It has also provoked a Youtube video response from Mike Klayko, CEO of Brocade Communications Systems, another Blade server provider threatened by Cisco's new foray. Klayko argues that customers will not want to buy into Cisco's propietary system, as that risks higher costs and lock-in.

Cisco also announced its acquisition of Pure Digital , maker of Flip digital camcorders, signaling a foray into consumer electronics and inspiring immediate speculation that it would challenge other consumer electronics firms or companies such as Apple with a presence in several markets.

Curiously, no one has really linked the two developments or explained how they fit into Cisco's overall strategy.

Atari video games (Jaideep Venkatesan)

Slate Senior Editor Michael Agger has an interesting article about the Atari 2600, Montfort based on a new book by Nick Montfort and Ian Bogost, Racing the Beam. Montfort and Bogost are professors in Media Studies who have written the first book in what is to be a series on technology platforms. Reading about Atari certainly brought back memories of playing Combat, Yars Revenge, and Raiders of the Lost Ark. It is amazing how Atari started the home video game industry, was seemingly successful in the early 1980's, only to fizzle out and then watch Nintendo flourish and take over the industry.

Agger doesn't really explain how Atari failed, other than to say:

"A lot of us started playing games on home computers. A bunch of big-time cartridges, like the infamous E.T., were huge busts, and retailers became gun-shy about ordering more titles and sent the ones they had on the shelves back. The returns bankrupted third-party game developers and fueled an industry consensus that video games were a fad—a toy whose time had passed. In two years, Nintendo would prove everyone very wrong."

It would be intriguing if Atari suffered, at least in part, because of the availability of home computers, a general purpose technology that allowed access to some interesting games but nothing like was available on single purpose devices such as Atari or Nintendo. The video game industry eventually evolved to use both general purpose PCs or Apples and single purpose devices such as the Xbox or the Wii. So I suspect that the availability of home computers wasn't really what did Atari in, but further investigation is needed.

Windows 7 Allows Disabling of Several Features (Jaideep Venkatesan)

CNET and PC Magazine report that the Windows 7 operating system will allow users to turn off several Microsoft features. PC Magazine leads with the Internet Explorer's disabling option. This represents a departure from Windows Vista, and could have ramifications in the popularity of Microsoft products beyond IE, including Windows Media, Windows Search, and XPS Viewer.

Microsoft: Lots to turn off in Windows 7

Internet Explorer Will be Optional in Windows 7

Technology Investment and Stimulus Updated (Jaideep Venkatesan)

NY Times columnist Thomas Friedman argues that instead of bailing out what he views as the "losers" (Big 3 auto manufacturers), the Federal Government should invest in information technology by funding venture capitalists.

Start Up the Risk Takers. 

Friedman's simplistic approach taps into a definite rising popularity of a basic idea - that government can, and should, invest in the American economy through appropriate spending mechanisms. Whether or not funding venture capitalists is the best option, his idea that government must play a strong role in the American economic growth through strategic investment is a sound one.

Technology Investment and Stimulus (Jaideep Venkatesan

EE Times breaks down the different types of technology investment in the American Recovery and Reinvestment Act. Naturally, most of the "technology investment" is in clean or alternative fuel technology, and rightly so. I'd be interested in additional government investment in high technology, given its roles in the recovery from the most recent recessions (early 1990's and early 2000's). The only non-energy technology spending listed is $580 million for the National Institute of Standards and Technology for technology innovation and manufacturing standards programs. , according to EE times.


Stimulus breakdown: $43 billion for energy technology

Massive deficit spending is clearly the only way that the economy can regain confidence, if it is done intelligently. It clearly wasn't done intelligently in the 2001-2002 period, as the stimulus was not targeted at those income groups, or economic sectors, most likely to stimulate the economy. Indeed, even economists who have opposed government spending to stimulate the economy have warmed to the idea, recognizing a crisis where the nation's economy shed over a million jobs in the last few months alone.

Economists Agree Time Is of the Essence for Stimulus

The Big Switch, by Nicholas Carr (Jaideep Venkatesan)

Nicholas Carr's The Big Switch is the latest entry in the "Cloud Computing" genre, though Carr forecasted the phenomena in his earlier book "Does IT Matter?". Carr compares the Internet, which he tries to rename the "World Wide Computer", will do for computing what the electric power grid for electricity - move companies from strategic customization of computing resources to a complete outsourcing for access to computing technologies. It is an intriguing metaphor for something that has been written about extensively elsewhere - the use of outsourced centralized servers for hardware and software applications, most notably offered by Amazon and Google.

Car admits that there are important differences between electricity in the early twentieth century and computing technologies in the twenty-first. Unlike electric power, computing technologies are much more protean, and the programmability inherent in computing technologies ultimately differentiates it from power sources. But even if that is the case, the metaphor Carr explores provides a useful starting point for forecasting what will happen to the industry.

On Jonathan Zittrain's The Future of the Internet (Jaideep Venkatesan)

Jonathan Zittrain's book, The Future of the Internet, and How to Stop It, is an extraordinary examination of computing and internet technologies in the "Web 2.0" world. Zittrain's thesis, which I will probably not do justice here, is that the personal computing and internet are generative technologies, which provide incredible opportunities for innovation but ultimately leave users vulnerable to security and privacy risks, including viruses, spam, and other versions of malware. There is a risk that popular fear of these risks will put pressure on regulatory authorities to lockdown the internet and computing industry and prevent both security risk and innovation, or the market will respond with "tethered appliances" that accomplsh the same things.

Zittrain counsels a set of community responses to these risks, providng generative answers to generative problems. He makes a provactive comparison to Madisonian government, in which the Constitutions' separation of powers and federalism doctrines were a response to moderate, but not choke, democracy in the late 19th Century, providing a republican solution to a republican theory.

See http://futureoftheinternet.org/