The public preview of Windows 8 has won “rave reviews” according to the Daily Mail, the newspaper that claims to reflect Middle England and is proudly conservative in every sense of the word. The Mail, it’ll have you know, is a feisty opponent of “change for the sake of it”.

So not only do I fear that somebody has spiked the water supply at the Kensington HQ of Associated Newspapers, the Mail’s publisher, I’m puzzled about what it is in Windows 8 that merits a “rave”.

For, apart from an outbreak of violent electromagnetic storms that zap our PCs at random, nothing is going to disrupt ordinary users as much as the design changes Microsoft wants to introduce. So detached from reality has Microsoft become, it touts every one of these disruptions as a virtue.

The problem isn’t Metro, it’s the Maoists

Metro is a user interface designed for smartphones, which I have praised generously, and which looks good and works well on small devices. It may yet mature into something equally attractive and useful on iPad-like tablets. But welded onto a non-touch laptop or desktop PC, it represents a huge negative for the majority of Windows users.

The problem isn’t so much Metro, which by itself represents some good thinking about touch device design. It’s Microsoft’s insistence on inserting Metro between us and what we want to do – and at times Metro is spectacularly inappropriate.

But over at Redmond, the Metro team appears to be completely out of control, like the Red Guard during Mao’s Cultural Revolution. They’ve sent the educated to the countryside to dig trenches, and for good measure broken their spectacles. Nobody seems to be able to say no to the Metro Guard, it seems, for fear of punishment. But welding this immature and inappropriate smallscreen UI into the everyday Windows experience is being carried out in a quite totalitarian fashion.

And this is being welcomed not just at the Daily Mail, of all places, but on blogs and fansites. Apparently, according to WinSuperSite the vanguard of the Red Youth will spend most of its time in Metro while the legacy UI will only be relegated for use by “office workers”.

Hey! That’s us!

I’ll explain a few of the problems here. But first, it must be said, it’s a bit of a crying shame.

Hit me again with your brilliance, Active Desktop

The Windows UI today has considerable room for improvement and simplification, and this can be done without causing such huge disruption to a couple of billion users. The Windows 7 don’t-call-it-a-dock Dock helped non-technical users without causing experienced users too much disruption. Many seasoned Windows users appreciate the Jump Lists, for example, and many who don’t like the feature can happily ignore it. It’s not intrusive.

It’s a shame because the underlying Windows 8 code shows considerable improvement. Windows 8 shows the fruit of several quiet years of throwing out the cruft and refactoring vital portions of the software for performance. Windows 8 boots much faster, applications spring to life, and many common operations just feel more responsive and crunchier – on the same hardware. Windows 8 without the Metro UI might even be the best version of Windows that Microsoft has produced.

So logically, Windows 8 could be released like Apple’s Snow Leopard, a minor $20 upgrade boasting no (or hardly any) new features but performance improvements all round. But of course, Microsoft doesn’t work like that. The accounts team want their margins, the marketing bureaucracy requires something to do. And an industry hangs off this. Consultants smell the prospect of fees, while bloggers hope to cash in with how-to books. Disinterested parties are hard to find.

The problem with Metro in Windows 8 is one of policy rather than execution. At the end of the day Metro is like one of those funky widget layers like Dashboard or Yahoo! Widgets or like a lockdown launcher, like At Ease. But the Maoists have dictated that this ephemeral layer must become the new shell.

You can’t avoid it.

The problems begin with the Metro screen, which is the fullscreen overlay now invoked every time you hit the Windows key, and the mandatory replacement for the old start menu.

This is what Microsoft wants you to see:

But once you’ve installed a few basic apps, this is what you actually see.

You see your iSCSI Initiator, your ODBC Data Sources and all your uninstallers. Microsoft hasn’t hidden anything or cleaned it up. It’s like when the camera accidentally wanders to the side of the soundstage and you see the backs of all the props.

So do you get anything from this new compulsory widget layer? Well, the quality of Metro apps varies, as you can see. The Maps app is very simple, so simple you can’t drop a pin, in fact. This next screenshot is a Twitter feed in the People app. Bear in mind that Microsoft specifies a minimum optimal screen width of 1366 pixels for Windows 8. And look what you get:

What a great use of space.

In time, no doubt, we’ll get more sophisticated desktop Metro apps – with the extra uncertainty that they won’t run on a Windows Phone, and smaller devices. Ho hum.

Here’s an example of both over-simplification and duplication, two issues which plague this release. Finding common items has become a crapshoot. There are two control panels, this being the simplified, Metro settings panel.

Very nice. Now where’s the Bluetooth toggle? Phones have them. It’s a trick question, because it’s not there.

Things get quite Heisenberg from this point on. Various options float in from the right hand edge of the Metro screen: Search, Share, Devices and Settings; Microsoft calls them “charms”. Click Devices and the only item populating it is “Second Screen”. The Windows 7 devices page has been ripped out of Computer and unhappily relocated in Metro Settings:

Now you can’t actually do anything with the devices here. Want to check the toner level of that Brother laser printer, or print a test page? Tough. Right click, and nothing happens.

Another strange inconsistency is task-switching. This seems to be something the Red Guard doesn’t want you to do. In last year’s developer preview of Windows 8, it wasn’t possible – you had to swipe through all your applications one by one. Like you do on Windows Phone. With a back button.

Microsoft has restored Alt-Tab, which now works as it has for the past 20 years (it was introduced in v3.1):

But you’re not supposed to use it in this brave new Metro World, you bourgeois recidivist! You’re supposed to use Win-Tab. But look what happens when you do:

Win-Tab slides open a vertical task bar on the left, with thumbnails of your running apps. Except it doesn’t. Here, Opera and Paint.net and a couple of Explorer windows are running, but not displayed. As task-switching goes it’s useless.

The most persistent annoyance is being thrown back into Metro when you don’t want to be, and while you can change the default handlers for every application Microsoft is going to insist on Metro.

The fix? Make Metro optional

This is just folly. Underneath we have a steadily improving OS, and we have a decent UI layer designed for smaller touch devices. That’s all fine.

I have nothing against Microsoft introducing Metro as an option, as it did with Active Desktop and Windows Widgets.

But inserting Metro into our everyday workflows causes many more context switches (modal switches, in the jargon) than we need. If you’re not on a touch device, there’s lots of pain for very little gain. We are fairly robust creatures who can cope with context switches and UI idiosyncrasies, and the web forces us to do it more often than any UI purist would want (Facebook has its own peculiarities, Twitter and LinkedIn have their own weird design quirks too.)

Microsoft should remember computers are the things getting between us and what we want to do, and making Metro – something so inappropriate for non-touch users – mandatory is completely unnecessary. Time to tame the Metro Guard, I think. ®

Windows Phone might be the most impressive bit of software Microsoft has produced – but it isn’t setting the world on fire. The iPhone and Android go from strength to strength – the latter proliferating so widely even Google doesn’t know how many Android systems are out there. (It can’t count the Chinese forks which don’t use any Google services and don’t phone home.)

This discrepancy puzzles people. Reviewers like WinPho a lot – it’s clean, fast, functional and forward-looking. The social media integration is very clever. Operators have a soft spot for Nokia and WP7 too, because – if for no other reason – they dislike and distrust Google and Apple even more. So what’s the problem?

Three weeks ago I raised the prospect that there may never be a third smartphone ecosystem – something upon which Nokia has bet the company. Many markets only have room for two leading players – and in the technology platform world, many have only one. On the margins the niche players are little islands. No matter how impressive WP is, if the needle doesn’t move, then it too becomes a marginal player. Ecosystems can perish more rapidly than they arise. If Windows Phone is to avoid the same fate as WebOS then the dynamic has to change.

But what might this be?

To help try and find an answer to this, I’ve been using Nokia’s Lumia 710 as a main phone – there’s no substitute for experience, and you can read my review of it here.

1. It’s a device business, stupid

The smartphone market is one driven by a desire for unique and distinctive devices – quite unlike the white box consumer electronics business. Operating systems and platforms don’t really matter to people, who make their choice from three or four models on display on the High Street at any particular time. This isn’t to say they don’t matter at all – nobody wants to choose a lemon – but if a phone is on display, it has a chance of selling.

Nokia has never had to think like this before, and spent the Noughties coasting on its brand and market position. Getting it to think about the customer and retail experience is one of the biggest cultural changes Elop has to make. Yet where are these quite outstanding and attractive devices going to come from? Microsoft’s reference platform allows little scope for differentiation or innovation.

A couple of years after announcing Android, Google did a strategic U-turn that upset many of its partners. It anointed a manufacturer to work with on what is essentially a reference phone, giving this chosen handset Google branding. The idea was that other ODMs (Original Device Manufacturers) would have to raise their game. It’s worked and nobody left the Android fold.

It’s hard to see Microsoft usurping Nokia’s branding (more than it already has), but the two need something creative to raise the visibility of WP in the public consciousness – it hasn’t left a footprint so far.

But Microsoft needs to loosen its reference platform to encourage some serious design innovation. Where’s the Windows Phone Communicator – with a clamshell or slide-out keyboard?

2. Growing up

This is probably the easiest of the problems to fix. It simply takes time, money and careful product management. WP7 was very much a working technology demonstration, lacking removable storage card support and a clipboard, amongst other things. Mango fixes a lot of these, but it still feels like a version 1.1 product. The flagship Nokia devices don’t have video calling or tethering, for example.

But it takes time. It took Apple three generations of iOS to implement a clipboard and four to implement coherent task switching and notifications. But these are major architectural features with huge knock-on impacts elsewhere. There’s little point in Microsoft getting one team to tune battery life when the system can change so drastically overnight.

Now I’ll get to the hardest problem. We need to raise some home truths about the Windows user interface, which aren’t noticed by bloggers and unboxers and only become apparent after extended use. Colour me surprised – you might be too.

3. We need to talk about the UI

The Metro UI for Windows Phone has been justifiably praised for being clean and distinctive. Microsoft is extending it across more products, most controversially, into Windows 8. But in extended use, I found myself using the phone less than I expected, because I simply didn’t want to read text on the screen. This realisation came quite subtly, and was unexpected.

Here’s what I think is the issue.

Some things in the world are theoretically human-readable, but nobody ever reads them. Postscript source code is one example, the fiction of Cory Doctorow another. Metro turned out to be a little like this. It is a UI designed to be glanced at, and it fulfils that very well.

But it makes poor use of the space available. My preferred WP Twitter app Rowl shows me three tweets at a time. You do have to pinch yourself that you’re using an 800×480 pixel screen. Entire newspapers were being laid out on VGA screens (or smaller – many were Mac Classics) 25 years ago – but this is a poor use of space.

The font is for glancing, not for reading, and the white-on-black colour scheme doesn’t help.

There’s too much thumbing going on. The default WP home screen shows you eight options. A thumb press will show you eight more options or twelve by revealing the Apps List. The default iPhone screen shows you 16, and a swipe 16 more. Android also shows much more. And from the Blackberry OS 7.0, I can change almost any setting by swiping from the top.

Now none of this is catastrophic – and it’s all fixable. Choose a better body font, change some of the proportions, and vary the size of home screen tiles – all would help enormously. But first, admit there’s room for improvement.

If you want to make the phone an "immersive experience", as per the jargon, don’t punish users for getting wet.

4. Give it all away? Not a good idea

"You can’t compete with free" is a cliche in the content world. And it’s proved one of the most misleading. Android is nominally given away for free, making Microsoft’s paid-for licensing model almost seem like an anachronism. Smartphone platforms are given away for free, or not given away at all.

But this argument is misleading. Android isn’t free at all, the patent uncertainties require ODMs to pay third parties – including Microsoft. This is a long way from being resolved.

So although one option is to go royalty-free, it’s one Microsoft doesn’t have to take. Not when there are more creative options on the table.

5. Telcos hate smartphones. They don’t have to hate yours

Telcos like growth, but they view smartphones very ambivalently. Once the pesky users have one – all they want to do is use it – the impertinence! – while the value of the services we use is captured by everyone except the telcos. So mobile operators have rapidly found themselves in same funk as broadband ISPs – who want punters to sign up (as long as the acquisition cost is low), and who don’t want them to leave, but who want them to use the network as little as possible while they’re there.

It’s a mug’s game: spending billions on network upgrades but seeing the value realised by device manufacturers (Apple) or ad networks (Google). The mobile network operators don’t want to be dumb bit-pipes – which is all they will be in Apple and Google’s future.

It doesn’t have to be like this – and Microsoft has an ace up its sleeve, with a messaging platform almost everybody in the world has heard of: Skype. It might be time to start thinking about some radical initiatives.

Here’s one: why exactly is Microsoft licensing Skype? Why is it even tolerating it? It paid a lot of money to acquire this proprietary VoIP messaging platform, and sees no advantage from it. How about raising the fees for Skype for some or all non-Windows mobile platforms? One of the first things Steve Jobs did in 1997 to stabilise Apple was to stop licensing MacOS and kill the clones.

And messaging is just one example. Advertising and media could benefit from some sort of semi-open shared platform on the wholesale side. This is something Microsoft and Nokia have thought about, so the idea shouldn’t be alien. But it makes sense to move value up the stack. When all smartphones look alike, one with an attractive bundle of messaging and content should be able to stand out from the crowd. We might even pay a pound or two more for it.

The verdict

Of course, Windows Phone might not need any of this. Perhaps it’s just not being seen, and will sell gazillions of units once people see it. Perhaps simply throwing more money at development and marketing will do. It worked for Xbox.

But Xbox was a success that was years in the making, soaking up billions of dollars of capital. Nobody involved in WP has this luxury. Nokia is fighting a battle on three fronts – and haemorrhaged €1bn last year – and Nokia is absolutely key to WP’s success. Although it has cash in the bank, it can’t fight on with this kind burn rate.

We know from WebOS, or BeOS, or many technically wonderful predecessors that won rave reviews from the critics only to perish in the marketplace, that being good isn’t enough. These are interesting times – the opportunity is there. ®

Humiliatingly, Nokia was forced to deny rumours last week that it was planning to break up and sell its crown jewels to Microsoft. Normally a company can remain impervious to Twitter-born gossip, particularly from a known antagonist.

Acknowledging the rumour simply gives it a chauffeured ride around the internet. But not this time: the ‘Microsoft buys Nokia’ story fulfils so many conspiracy theories, thousands of people wanted it to be true.

And the notion of Microsoft buying a hardware company and ripping up its licensing business has become much less outlandish after Google’s acquisition of Motorola’s phone business. Ah, but that was desperation, I hear you say; the Chocolate Factory had miscalculated its IP strategy catastrophically, and it had to grab what patents it could at almost any price.

But there’s a whiff of something – it isn’t desperation, more like earnest exasperation – around Microsoft’s phone business these days. Redmond has got an excellent product, for the first time, and people who have a Windows Phone love using it. But there just aren’t many of those folk around. The phones aren’t shifting. Christmas has come and gone, and while we wait for some reliable channel figures, Nokia’s flagship seems to have made almost no impact on the UK market. It’s the phone that leaves no footprints.

So that makes Nokia’s American comeback all the more challenging. Your reporter has lost count of the number of thwarted US comebacks Nokia has made over the years – each time the story ends the same way. Either the operator gets cold feet or Nokia gets cold feet first.

In recent years Nokia baiting has become a cruel bloodsport for American pundits and bloggers, the latter even refusing to review Symbian phones on the reasoning that, well, they must be rubbish. After years of being patronised by Europeans and told to catch up, talking heads in the States are now taking their revenge. Europe’s dominance turned out to be temporary; the US public is now getting the best gadgets and fastest data networks first – even if the nature of the competition means they’re paying a high price for it. And as the industry leader in Europe’s 2G dominance, and general bossy boots, Nokia is now getting thoroughly beaten up for missing out.

This is not the most promising position from which to launch your comeback – but then again, expectations are now calibrated so low that any success is going to mean a lot.

Yesterday Nokia launched what’s probably its most competitive US product for a decade. You’re welcome to contest that claim, of course (fire away!) but bear in mind that the last time Nokia caused a ripple was four years ago. That was with a US model of the N95 – marketed under the slogan "this is what computers have become" – which was delivered six months after the Apple iPhone had started shipping.

The Lumia 900 has a fair bit going for it. It’s got a modern UI that’s really nice to use. It’s got the backing of a major operator. And it’s bang up to date with advanced network technology – it’ll be able to use AT&T’s LTE data network, which is already live and due to be rolled out in full by the end of next year.

But it also has the drawbacks of The Phone That Leaves No Footprint. The 900 is identical to the 800 but with a larger screen – which brings no additional increase in screen resolution – and larger battery. The 900 also shares the 800′s peculiar camp colour palette, which restricts its appeal. And the same harsh square corners – and the camera mirror that scuffs if you so much as breathe on it. All these points have been flagged by multiple reviewers but Nokia seems quite deaf to them, and quite insistent that it’s the greatest design ever.

"It looks sleek and progressive on the outside," according to CEO Stephen Elop in a canned promo video. I can understand sleek, but what on Earth does progressive mean here?

The tech bloggers’ criticism that it’s not cutting edge remains a valid one: compare the screen resolution to the Galaxy S2 or the Razr Android. This matters, not because most punters fit the boy racer category (they don’t), but in perception: it’s a fast moving market and regular buyers don’t want to lock themselves into two-year contracts with something they fear will be obsolete. And how frustrating this must be: the Lumias perform extremely favourably to the competition.

The greater problem for Nokia – and Microsoft – is the nagging idea that there’s no room for Windows at the smartphone table, no matter how fabulous it is. Remember that Elop’s great gamble at Nokia is to make Windows the ‘third ecosystem’. Well, maybe there isn’t going to be a third ‘ecosystem’ in smartphones. Maybe there’s going to be Apple, Android, and everything else – BlackBerry, featurephones and dumbphones. After all, there wasn’t room for more than two in PCs.

It’s too early to tell yet. Nokia has yet to throw its best designers (assuming they haven’t all left) or radical innovations at Windows Phone yet. This is very much a product market, one that’s crying out for some differentiation at the moment.

But if it turns out to be the case that there are only two ‘ecosystems’, then the Armageddon option of breaking up the company doesn’t look quite so irrational.

Google’s failure to dent the Microsoft monopoly will simply notch up another failure for Linux (whose fans are quite happy to work for The Man, as long as it’s not the Man from Redmond) – and it’ll do nothing for consumers. How so? Because the computing problems we’ll have tomorrow will still be the same ones we have today.

Last week, a Judge dismissed a defamation law suit brought by Tim Paterson, who sold a computer operating system to Microsoft in 1980, against journalist and author Sir Harold Evans and his publisher Little Brown. The software became the basis of Microsoft’s MS-DOS monopoly, and the basis of its dominance of the PC industry.

But history has overlooked the contribution of Kildall, who Evans justifiably described as “the true founder of the personal computer revolution and the father of PC software” in a book published three years ago.

In a chapter devoted to Kildall in Evans’ They Made America: From the Steam Engine to the Search Engine: Two Centuries of Innovators, Evans related how Paterson “[took] ‘a ride on’ Kildall’s operating system, appropriated the ‘look and feel’ of [Kildall's] CP/M operating system, and copied much of his operating system interface from CP/M.”

The story of how Bill Gates came to acquire an operating system is well known. In 1980, Kildall’s Digital Research provided the operating system for a wide range of microcomputers, and was established as the industry standard. IBM had approached Microsoft, then a tiny software company in the Seattle area, to provide a BASIC run-time for its first micro, the IBM PC. Gates offered to provide IBM an operating system too, even though he didn’t have one at the time. This required a hasty purchase.

Microsoft turned to Tim Paterson, whose garage operation Seattle Computer Products was selling a CP/M clone called 86-DOS. This had been developed under the code name QDOS (for “quick and dirty operating system”), and SCP sold it alongside an add-in CPU card. Microsoft turned this into the hugely successful DOS franchise.

(The oft-told story of Kildall spurning IBM to fly his plane is deeply misleading. It was IBM’s distribution and pricing of CP/M, which in the end was one of three operating systems offered with the first IBM PC, that ensured MS-DOS captured the market.)

Paterson brought the case against Evans in March 2005, as we reported here, claiming that Evans’ defamatory chapter caused him “great pain and mental anguish”.

Evans was puzzled that the chapter drew a defamation suit as it merely “recapitulate[d] and state[d] what 11, 12, 15 other books [said] and there [was] no public outcry, no public corrections, no website corrections, no criticism in reviews [that any of the accounts were erroneous”.

Taking a dim view of lawsuits designed to curb the First Amendment rights of journalists, Judge Thomas Zilly found that Paterson’s lawsuit failed on several important counts. In US law, Zilly pointed out, “truth is an absolute defense to a claim of defamation”.

Judge Zilly said Paterson falsely claimed Evans credited Kildall as the “inventor” of DOS, weakening his case. At the same time, the Judge found, Evans had faithfully recorded Paterson’s denial of Kildall’s view that QDOS “ripped off” CP/M.

The Judge also agreed that Paterson copied CP/M’s API, including the first 36 functions and the parameter passing mechanism, although Paterson renamed several of these. Kildall’s “Read Sequential” function became “Sequential Read”, for example, while “Read Random” became “Random Read”.

(DR came to regret not suing Microsoft “very early on”. For his part, Paterson was to plead that his operating system of choice, Kildall’s CP/M-86, was at the time unavailable for products based on Intel’s 8086 that he wanted to sell, necessitating the hasty clone).

Finally, Judge Zilly concluded that Evans acted without malice, and castigated the plaintiffs for introducing irrelevancies into court, including the claim that Kildall was an alcoholic.

“Plaintiffs fail to provide any evidence regarding ‘serious doubts’ about the accuracy of the Kildall chapter. Instead, a careful review of the Lefer notes… provides a research picture tellingly close to the substance of the final chapter.”

And with that, the case was dismissed.

The PC world might have looked very different today had Kildall’s Digital Research prevailed as the operating system of choice for personal computers. DRI offered manufacturers the same low-cost licensing model which Bill Gates is today credited with inventing by sloppy journalists – only with far superior technology. DRI’s roadmap showed a smooth migration to reliable multi-tasking, and in GEM, a portable graphical environment which would undoubtedly have brought the GUI to the low-cost PC desktop years before Microsoft’s Windows finally emerged as a standard.

But then Kildall was motivated by technical excellence, not by the need to dominate his fellow man.

Why? Because the Open Content Alliance is out of money – and Microsoft was by far the biggest financial backer.

Brewster Kahle, whose Internet Archive project is a key OCA member, admitted the financial impact of Microsoft’s withdrawal was “significant” and that the Alliance now needed fresh resources to keep the scanners running. The initial $10m was almost completely exhausted.

Google differs from the impoverished Alliance in that it doesn’t ask for permission from copyright holders; it simply instructs its stormtroopers – the participating libraries – to rev their machines and start copying.

For this, the ad giant has received lawsuits in the US and France from authors and publishers. Google has fought back using sock puppets of its own. Stanford Law School’s anti-copyright centre has been helping out the Google cause – and received a $2m thank you in return.

(Curiously, “anti-corruption campaigner” Professor Lessig omits this relationship in his own, verbose declaration of interests – a taste of things to come, perhaps.)

Yet the policy will be brutally effective, with Google holding a monopoly on the printed word in book form.

Microsoft says it will donate the books digitised by Live Book Search to the copyright holders. Meanwhile, Google will surely never see a monopoly fall into its lap quite so easily. The future of digital books is now entirely in its hands.

(But perhaps not the future of books – given how superior paper technology is to digital. As Simon Jenkins wrote recently, the physical book just looks better all the time.)

He couldn’t care less that employees were “wasting” time on Facebook – that was a “problem” for their line managers to deal with, and not an IT issue. (Why should IT be blamed if staff played with Rubik’s Cubes all day?) He had always encouraged people to try new software, so long as it remained within the firewall. The real problem, he thought, was that the Web 2.0 cult is loyal to what’s perceived to be good for the greater “Hive Mind”, not the organisation.

This resulted in staff with conflicting agendas.

For example companies were being urged to “share” IP that would prove valuable (even life saving) to them in the future. (There’s a new book Wikinomics, that preaches this, with little discrimination). Or projects were being rushed through with little cost/benefit analysis – or consideration of the consequences – because they fulfilled the evangelists’ buzzwords.

The cult-within-the-organisation is a fascinating subject – one that we’ll be reading about aplenty in the management columns, and eventually on sociology courses for years to come. A more detailed examination of this cult/religion is beyond the scope of this article, but I’ll highlight two very relevant characteristics.

This group of people looks cultish for several reasons. (I first observed the cult-like properties of the web utopians several years ago, reporting on what was the forerunner to the Web 2.0 conference.)

It’s a consensus culture that brooks no disagreement – except from the top-down, ironically enough – and reacts to criticism as if being personally attacked.

They also speak their own language: a strangulated and weirdly dehumanized collection of buzzwords: “nodes”, “community”, and “conversation”, for example, have had the life flogged out of them. But most of all, the blog and wiki evangelists give the impression that they have arrived, fully formed, with no recollection of history or economics prior to 2003.

For the Emergent People, everything is new again!

As we know, if we ignore history, we’re doomed to repeat the same mistakes over and over again. If we disregard basic economics, we’re at the mercy of people who pay just a little bit more attention. This came to mind reading the latest submission from the legal departments of the ten US States to the ongoing antitrust regulation process against Microsoft.

Just as Web 2.0 has been a gift to Rupert Murdoch, it’s also a PR gift for Microsoft. Now Microsoft is turning this mood music to its competitive advantage.

Microsoft, you’ll recall, agreed to a gentle program of regulatory oversight in the US five years ago. Now that program is up for renewal, Microsoft says it doesn’t need to any more oversight. Why not? Because of the software as a service revolution!

The war of words has been ongoing for some time. Marco Iansiti from Harvard Business School has been making the 2.0-case for Microsoft. Two experts, John Kwoka and Ronald Alepin, have been deployed to rebut it on behalf of the Ten States.

On November 6, both parties filed an update.

Microsoft filed a supplemental written by Iansiti: you can download it here [PDF 660kb, 12pp]. It’s a must-read.

“The Internet as an alternative platform is ubiquitous,” he claims. Microsoft also adds that the pace of innovation since 2002 has risen – and Web 2.0 is proof.

(Yes, all those lame excuses for websites that are mercilessly lampooned by Uncov, are actually bleeding edge innovation. Fancy that! )

According to Iansiti, Google, Salesforce.com, Mozilla and Tim 2.0′Reilly’s mighty army of JavaScript-typing, buzzword-spouting monkeys are all cited as proof that Microsoft doesn’t need to be regulated at all.

But if Microsoft prevails, then even the small fissures opened up by the “Seattlement” may soon close the door on new opportunities, the States Fear.

“The ‘Internet Platform’ … does not even exist, much less constitute for the foreseeable future a practical or viable alternative to the desktop platform,” responds Alepin, in a filing made the same day.[PDF, 223kb, 32pp]

(Props to IDG’s Greg Keizer -the only reporter to follow the arguments).

Such worries aren’t shared by the Web 2.0 cultists however – they either don’t have any worry cells in their heads, or their worry cells are fully preoccupied with persecution fantasies about the dying record industry, or telecoms companies.

These evangelists think that Microsoft is dead, dying – or at the very least, irrelevant. This utopian optimism has affected others, too. CNET blogger Matt Asay voiced similar thoughts in a recent Open Season podcast here. Listening to Matt, Microsoft belonged to a distant era, such was the magical power today of “open source”. He didn’t really care how it was regulated.

( This is an odd position to take. One of the small concessions Redmond was forced to make was to agree to document and license its protocols. It’s a tiny crack in the monolith, and it has permitted a small number of MS-compatible open source companies to spring up. Zimbra, for example, was acquired by Yahoo! for an improbable $350m. Zimbra’s is a rock-solid open source email service, but its inflated valuation is because it also offers a very limited Exchange-compatible client. )

Nor does the happy-go-lucky Digg crowd, many of whom weren’t born when the first FTC investigation began in 1991.

Who are you kidding?

Not to labour the point, here are some inconvenient facts.

OS innovation has never been slower: Windows and Mac users have never had to wait longer between OS releases. They’ve never been unhappier, either: many users of the latest incarnations of these operating systems – Vista and Leopard – feel like abused guinea pigs. And Microsoft and Apple? Never wealthier, thank you very much.

So this is what the 2.0 revolution looks like: a concentration of power with the people who had it already.

Take this example from former teenage dot.commer Benjamin Cohen – who was six when FTC first trained its lawyers on Redmond. After taking a pop at the at “anti-Microsoft lobby”, he declared on the Channel 4 News website:

The judgement is based on an old case and in many ways an old world – where Microsoft really was the dominant player in information technology

Stop kicking the kindly old man in the Windows outfit, he said.

It’s hard for it to have too much relevance today.

You’d think from this brilliant piece of insight, that there is hardly anyone left who uses Microsoft Windows or Office. Maybe, like the Acorn Archimedes, it’s a hobbyist system lovingly kept alive by a few, devoted enthusiasts! Benji even sounded slightly resentful at being torn away from Facebook (or Sadville) for a few minutes, to write about this piece of computer history.

But the question of “how we deal with Microsoft” is more relevant than ever for two very important and reasons: the second follows from the first.

It’s Microsoft’s game

Firstly, the proportion of national wealth that goes to Microsoft is higher than ever. More people have Windows PCs at home, and as more countries acquire more PCs, so the dependence on Microsoft software grows. As a measure of how much, look at the earnings. Microsoft earned $36bn in 2004, and is projected to earn $63bn in FY 2009. Some “declining relevance”.

In addition, Microsoft now has the desktop computing franchise for as long as it wants it – because its rivals have given up and gone home, or carefully avoid competing too hard with it. This is a hard truth for many people to accept.

Linux has failed to compete on the desktop because it isn’t up to the task of being a consumer operating system, and Apple avoids competing because its focus is on digital media, and the Mac is a nice little earner as it is. Why should it rock the boat?

These days, Steve Jobs is a director at Disney – and Apple isn’t even called “Apple Computer” any more.

Even with Mark Shuttleworth’s benevolence, Ubuntu is still a long way from providing the ordinary user from a drop-in Windows replacement.

And Microsoft has countered the threat of the institutional adoption of Linux, particularly in emerging markets, by lowering the price. Few could would have predicted a few years ago that China and India would go Windows. Few anticipated Western public sector bodies continuing to pay large license fees to Redmond. But a slightly lower license cost, and the more abstract notion of “software freedom”, weren’t enough to win the day for F/OSS.

As the FSJ [aka Forbes' Daniel Lyons] wrote recently:

You’ve lost. You’ve had sixteen years to try and build a desktop operating system, and you still can’t get your shit together. Nobody wants your software. It’s not Microsoft’s fault. It’s yours.

All of which makes Apple’s position all the more frustrating. For a small premium it offers a substantially better and more secure experience than Windows. When ordinary users and businesses have the chance to use it, they like what they see. They’ll typically opt for Windows, however, with consumers put off by the perceived price difference and the Mac’s niche status, while enteprises are wary of lock-in to a single hardware vendor – especially with Apple dropping the “Computer”.

… and Apple won’t play

Yet Apple could remedy both if it embarked on a carefully selective licensing program, and permitted chosen OEMs to offer the Mac in more diverse forms. The company has never been in a position to do so before. Today, it can: in the last quarter Apple earned $2.53bn from computer sales, while $2.17bn came from iPod and music and phone products – and this before selling 1m iPhones.

It isn’t hard to envisage Mac OS X reaching 25 per cent market share – which would address the last remaining reason for choosing Windows: there’s more good specialist software written for it. But Apple won’t allow it. With the Mac it’s not a case of “can’t compete”, but “won’t compete”.

But ahh, you say – what about some great paradigm shift? Twenty years ago the PC wrenched control of the industry from IBM and other big vertically integrated companies, and handed it to Microsoft and Intel. What Nick Carr calls “The Big Switch” may make expensive desktop computers redundant. Just as Marc Andressen promised to make Windows “a poorly debugged device driver layer”, Google’s service bureau model of computing promises to make a PC an off-line backup, for those rare moments when the network goes down.

Well, we were here before with thin clients, and today it’s called SaaS, or software as a service – and each time the economics are compelling. This time there’s evidence of some steak behind the sizzle: Salesforce is a great example of businesses doing more work in a bureau model. But to think of one model entirely superseding another is quite wrong: IBM is still here, and the unique flexibility of the PC means it will be around for a very long time too.

In addition, the sheer inefficiency of the browser-based “Web 2.0″ environment (Yahoo! 2.0-ified Mail Beta brings a dual core PC to its knees) pretty much guarantees you need some hefty hardware. So for the foreseeable future, SaaS services will be another application you run on your PC.

And once you’ve got a PC, you’ve got Windows. Now what?

Savour this irony.

Last week, we learned that incompatibilities Microsoft hadn’t written into its operating system posed a grave threat to users. Last week, we also learned that genuine incompatibilities Microsoft had deliberately written into its operating system posed no threat at all.

In the first instance Microsoft had primed a public relations campaign to warn of the dire consequences posed by these bogus incompatibilities. In the second instance, and times must be tough up there, Microsoft avoided using its public relations professionals to tell us that the genuine incompatibilities were harmless.

Are you still with us? If you’re feeling bewildered, your confusion is understandable.

The first instance refers to incompatibilities between Microsoft’s Windows 386, 3.x and Windows 95 products and DR-DOS. This was an operating system developed by Digital Research, and later acquired by Novell, which was 100 per cent compatible with Microsoft’s MS-DOS. Thanks to citizens in Iowa, who are pursuing a consumer class action lawsuit against Microsoft, these ancient malpractices are being aired once again, and Microsoft executives have been on the stand in Des Moines defending the company’s conduct.

Microsoft wanted users to believe that interoperability between DR-DOS and Windows was problematic.

The second instance refers to incompatibilities between Windows Vista and next-generation High Definition DVDs, BluRay and HD-DVD. The incompatibilities are deliberate, and part of the specification Microsoft gave hardware manufacturers so they could design Vista-compatible hardware. Just before Christmas, Peter Gutmann published a technical analysis of the Vista incompatibilities, listed some of the potential security and stability threats they posed, and some of the situations where they might cause real harm.

In this instance, while Microsoft has gone to great lengths to booby-trap its software to disable functionality when certain media discs are being played, and to degrade performance when it finds what it thinks is counterfeit media, or “unauthorized” copying — it wants us to believe this will not have serious consequences for users.

(Until Vista is tested in real world conditions, we won’t know for sure if Gutmann’s claims are alarmist and Microsoft is telling the truth, or not — or somewhere in between.)

We’ll deal with the most topical first.

Gutmann analysed the hardware specifications and declared several problem areas. When “premium content” was being played some functionality was deliberately disabled, specifically video I/O. Vista uses “tilt bits” to detect fluctuations in voltage and severely degrade the operation of the computer. He also said the specification posed problems for programmers developing free software device drivers, and would make the Vista-compatible hardware more expensive than it should be. Finally, Gutmann described catastrophic consequences for users who discovered their driver had been “revoked”.

Rather than address questions from Gutmann himself, or from the technical press and analysts, Dave Marsh, Microsoft’s lead program manager for video chose his own questions to answer, and passed them along to a colleague, who posted them on his blog.

Naturally these include several answers to questions Gutmann didn’t ask, but avoiding the press by selecting awestruck bloggers instead is Microsoft’s preferred way of dodging hard questions these days: at CES this month, Gates would only be interviewed by bloggers.

“Gates seems really relaxed unlike in many other interviews I have seen,” noted a blogger after watching one of these grillings, conducted by … a former Microsoft marketing guy.

Gutmann hadn’t asked whether Vista’s “content protection requirements apply equally to the Consumer Electronics industry supplied player devices such as an HD-DVD or Blu-Ray player”, but Marsh answers anyway. From then on, it’s a mixed bag.

Marsh agrees that Vista’s DRM taxes the CPU. He dodges the issue of Vista’s specs making hardware more expensive by saying that integrating DRM onto the chip in volumes will eventually bring the price down. (That’s a “yes”, then).

He agrees that S/PDIF, component video and audio are degraded, but says they are already in Windows XP and invoked when requested – and he passes the blame onto Hollywood. He refutes Gutmann’s claim that playing back protected content degrades the rest of Vista video output. (Gutmann cited the hypothetical case where medical images would be displayed in lower than optimal resolution when a protected High Definition DVD was being played at the same time – although if your radiographer is watching Porkys III Hi-Def Edition while looking at your scans, we suggest you find a new radiographer).

Marsh confirms that “tilt bits” will cause problems, but he ducks the question of what circumstances will cause tilt bits to be set, and throws the responsibility back on to the hardware vendors. He writes:

“It is pure speculation to say that things like voltage fluctuations might cause a driver to think it is under attack from a hacker. It is up to a graphics IHV to determine what they regard as an attack. Even if such an event did cause playback to stop, the user could just press ‘play’ again and carry on watching the movie (after the driver has re-initialized, which takes about a second).”

And… then what? Wait for another tilt bit reset, we guess, from speculative causes.

That sure sounds like a fun evening in!

And we throw Marsh’s reply to the F/OSS drivers issue open to you. Marsh asks,

“Do things such as HFS (Hardware Functionality Scan) affect the ability of the open-source community to write a driver?” And Marsh answers… “No. HFS uses additional chip characteristics other than those needed to write a driver. HFS requirements should not prevent the disclosure of all the information needed to write drivers.” Gutmann, who isn’t named in Marsh’s ventriloquist routine, isn’t impressed.

“Saying ‘we were only following orders’ has historically proven not to be a very good excuse,” he told the BBC News Online website. “If you have got the protection measures there, the impulse is to use the most stringent ones at your disposal.”

We’ll deal with events taking place in freezing Iowa in a more detail in a follow-up tomorrow, but the basic facts are as follows. The case has been a replay of Caldera vs Microsoft, with evidence brought in from other investigations. Caldera had inherited DR-DOS from Novell. Suit was filed in July 1996, and discovery continued throughout 1998 and 1999, with a serious of unfavourable judgements against Microsoft, one of which expanded the scope of the lawsuit. Microsoft settled just a week before it was due to go to court in January, paying Caldera $275m in damages. The Register covered the trial in detail at the time (list of links here, juiciest quotes (http://www.theregister.co.uk/1998/10/20/microsoft_on_trial/) here (http://www.theregister.co.uk/1999/05/24/unsealed_caldera_documents_expose_ms/).)

As with Internet Explorer, and Windows XP, Microsoft had failed to add new features to MS-DOS for several years. Microsoft adopted several tactics to destroy DR-DOS, the most damaging of which was tying PC makers into secret per-processor license agreements, which meant that they paid for Microsoft’s MS-DOS whether they shipped it with the PC or not, foreclosing the most important route to market.

But as DR-DOS matured, and Novell developed an alternative retail channel for the product, Microsoft adopted a campaign of disinformation. With the growing popularity of Microsoft’s Windows 3, which ran on top of either DOS, Microsoft wanted users to think that performance would degrade if using Windows with Novell’s rival product.

The formidable talents of Waggener Edstrom were enlisted. Microsoft’s DOS product manager Richard Freedman took the campaign to the press, vowing to “FUD DR DOS with every editorial contact made,” and to “develop key DR DOS FUD points for all press tours”.

“We’ll basically be covering all the key editors … We recommend that we ‘informally’ plant the bug of FUD in their ears. ‘Have you heard about problems with DR DOS?’ ‘That security feature is a neat idea and, gosh, such a feature would be great, but it’s just too easily circumvented.’ ‘Gee, it’s unfortunate that DR DOS can’t be loaded high all the time. MS-DOS 5.0 can.’ We’ll do this very tactfully. ‘If Digital Research came to Microsoft for help making DR DOS work with Windows, would Microsoft help them? Maybe not?’”

On Friday the Des Moines court heard this piece of testimony. It’s a video from an FTC hearing from 1993, and in the dock was Phil Barrett from Microsoft. It makes for an interesting comparison with the offering from Dave Marsh, above.

Question: Mr. Barrett, you were just asked if you had any knowledge of any Microsoft effort to produce any incompatibility between OS/2 or DR-DOS and Microsoft Windows. How do you define incompatibility within that context? What was your understanding of what you meant by that?

Answer: To prevent the products from working together.

Question: Would you consider an incompatibility something that popped up in, say, a nonfatal error message when there was no error that was being detected by that software?

Answer: No, I would not call that incompatibility.

Question: How would you make the distinction between the two?

Answer: Well, there was nothing done explicitly to prevent Windows from running on that operating system.

Question: Mr. Barrett, you were just asked if you had any knowledge of any Microsoft effort to produce any incompatibility between OS/2 or DR-DOS and Microsoft Windows. How do you define incompatibility within that context? What was your understanding of what you meant by that?

Answer: To prevent the products from working together.

Question: Would you consider an incompatibility something that popped up in, say, a nonfatal error message when there was no error that was being detected by that software?

Answer: No, I would not call that incompatibility.

Question: How would you make the distinction between the two?

Answer: Well, there was nothing done explicitly to prevent Windows from running on that operating system. That’s what is meant by incompatibility. It’s simply a message. If we played a tune, that wouldn’t be an incompatibility. That’s what is meant by incompatibility. It’s simply a message. If we played a tune, that wouldn’t be an incompatibility.

Just fancy that!

The declaration follows three major “interventions” in fifteen years. A 1991 investigation by the Federal Trade Commission resulted in a Consent Decree signed in 1995. A 1997 investigation by the Department of Justice, joined by a number of US states the following year, resulted in a conviction and settlement in 2002. And just last month, the EU rejected Microsoft’s claim that it was complying with a 2004 antitrust settlement.

Microsoft calls these vows “Windows Principles”, or “Twelve Tenets to Promote Competition”, and they reiterate many of the pledges made in 1995, 2002 and 2004.

“Through the set of voluntary Windows principles that we are announcing and adopting today, we’re taking a principled, transparent and accountable approach to the future of our operating system,” said Microsoft’s general counsel Brad Smith.

Some of these “principles” are familiar – others are plain strange.

Pledges you may have heard before include a promise to permit OEMs to choose their own desktop icons and remove Microsoft’s, and not to retalitate against OEMs. These were part of the 2002 Settlement.

There are promises to document its server APIs (made in 2004), and license its IP on a “fair” royalty basis (2002).

Then come the strange vows.

Microsoft will not prevent anyone from installing their own software, it says, nor will Windows “block access to any lawful Web site or impose any fee for reaching any non-Microsoft web site.” As far as we can remember, not one of these transgressions has ever happened. What Microsoft has been found guilty of in the past, however, is preventing already-installed software from running as it should (DR-DOS); and blocking access to third-party browsers (Opera). But in the latter case, it was MSN that was doing the blocking – not Windows.

“We want the developer community to know that it is free to develop, support and promote products that compete with any part of Windows,” says Microsoft.

Two months ago Microsoft and the Department of Justice agreed to renew the monitoring period, which was due to expire next year, for an additional two years.

Microsoft admitted that its documentation program “needed a reboot”. The EU is currently fining Microsoft.

“One day at a time, Lord,” said Smith.

No he didn’t – we made that bit up.