IT Investment Research

data.gov Offers Open Access to Sex in U.S. Heartland

Now that I have your attention, I note with interest that the Obama administration is now providing us with everything we ever wanted to now about the skin color and sex of U.S. farmers but were afraid to ask.

The president through his budget director demanded last year that all government agencies provide "three high-value datasets" online in an "open format" on data.gov by Friday January 22, 2010. The Agriculture department has responded with the "2007 Census of Agriculture Race, Ethnicity, and Gender".

 I didn't download the txt/csv file that contained the data but I am almost certain that this data involves the sex and the skin color of the farmers and not the animals. Other "open formats" apparently supported on the data.gov include Microsoft (MSFT) .xls, the W3C's Extensible Markup Lanuage (XML), Google's (GOOG) Keyhole Markup Language (KML)/KSV, and Shapefile.  Those are open enough by my market-centric definition of standarization but I am not sure open-standards purists would agree. Where is Sun's (JAVA) Open Document Format (ODF)? Apparently aware that that might be an issue, the Obamanistas did not include Microsoft's .xls in its catalog's logo although it did show Google's KML.

Speaking about purity, if you're prudish about such things as farmer sex, race and ethnicity there is a feed grains database (also from the Department of Agriculture), the National Weather Service's data from the Community Collaborative Rain, Hail and Snow network, the marital status of personnel on active duty in the U.S. armed forces, FEMA's summary of federally declared disasters, and more.

I am just having a little fun here.  There's a lot of more generalized stuff too.

The budget director's memo itself was formated in Adobe (ADBE) .pdf, one of about a dozen "open formats" recognized by the International Standards Organization.

-- Dennis Byron

Milking Madoff: Is Massachusetts Looking for the IT Connection

CNN ran a Special Investigative Report on Madoff Secrets on the weekend of January 10/11 but failed to dig into the information technology (IT) part of the story. Admittedly, IT is boring but the scheme that Madoff admits to could not have been pulled off without major IT support from people working for Madoff or for a service-bureau that supported him. Some IT guys had to know.

Massachusetts Secretary of State Galvin, a PR-happy pol, is reportedly wading in with his own subpoena however, into a morass you would think a securities regulator would fear to tread. You would think, that if the SEC should have protected all investors, Galvin should have protected Massachusetts investors. But he doesn't seem to see it that way.  Especially when there is a headline to be had.

In reality all Galvin can do is some weak-kneed administrative stuff (just like the SEC) but as a result he might be stumbling on the answers to the questions CNN did not ask. 

• Who wrote the programs that made up the fake trades?

• Who wrote the program that spit out the bogus statements? 

• Who entered the data that must have changed every month?

• And on and on?

I am sure Galvin is more interested in the sales vs. service side of the equation; there is a lot of publicity up here about the Palm Beach Country Club guys with the MG.  But while he's there, hopefully he'll ask the important questions that CNN failed to investigate.

-- Dennis Byron

(As an aside, as for the victims the TV people keep dragging up, I feel sorry for the millionaire widows and orphans interviewed but it is not correct to blame "the U.S. system."  The entire  U.S. financial system pushes people not to invest in one basket.  Examples include FDIC insurance encouraging people to put savings in multiple banks, SIPC rules to use multiple brokers, and ESOP rules that encourage those over 50 (or maybe 55?) to diversify out of their employers' fund. I don't need  Massachusettspols to tell me that. But that's not really the point of this blog.)

-- Dennis Byron

IBM, Sun cool OOXML rhetoric in the hot Northern Hemisphere summer

I am sure it's just a coincidence that the current protests against the Microsoft (MSFT) OOXML/ECMA/ISO/IEC 29500 standard came from south of the equator where it is winter. The standard has passed what is probably its second-to-last hurdle. Yet up here in the hot Northern hemisphere, most of the combatants are pretty cool about the latest news. Now the marketplace can decide which is how it should have worked from the beginning.

The response of Sun (JAVA) and IBM (IBM), which wasted shareholder value fighting over the Office 2007 document format in earlier stages of the process, ranges from non-existent to a soft whisper. Red Hat (RHAT) as usual framed the news as an open source community issue (“the community loses”) even though there is no connection between open source and standards. But Red Hat did say:

“If there is, in fact, a silver lining to this, it is that people are paying more attention to open standards.” 

It’s good to see Red Hat using lower case in the place of the usual propagandistic Open Standards.  

Most of the press with the exception of the IT supermarket tabloids such as The Inquirer and TechTarget played the news on August 15 straight. These tabloids spun the deception and misdirection you’d expect but received relatively little commentary as compared to what such rabble rousing would have generated between January 2006 and April 2008.

That’s another sign that the temperature has been turned down and that the Open Standards blogosphere has little momentum unless IBM and Sun fan the flames. I am happy about this from my IT Investment Research perspective but disappointed as a blogger.  August is a slow news period and I was counting on some red meat from the IBM/Red-Hat/Sun fringe groups to fuel a few posts.

But the Open Standards/Digistan/Document Freedom Day blogoblather that I saw was also mild. It seemed to range from “fight on,” which will probably require some continued funding from the anti-free-market, pro-government-control-of-the-economy public companies mentioned above, to the ever-present “the ISO rules are unfair.” I think the appeal process should be taken as far as the rules allow so as to totally clear the air but not on the backs of Sun, IBM and Red Hat shareholders.

As a result, for the first time to any extent that I have seen, the position of ISO seems to be getting some air time.  I don’t agree with what ISO Secretary-General Alan Bryden says in this comprehensive Reuters interview about ISO’s role in letting the market decide but at least all but a few digiterrorists now seem to be willing to talk about these issues in a reasoned fashion.  In particular, Bryden says at one point:

“Multiple national standards may be appropriate in areas such as building and clothes where local geographic and climatic conditions make unique international standards less useful. As a general rule, the objective at the international level is to have one, globally relevant standard. It can sometimes happen, especially in fast moving areas such as IT, that broadly similar standards, but focused on different functionalities, may each engage the interest of market segments. In such cases, multiple standards can exist and it is the market that eventually decides which will survive.”

I don’t think “one globally relevant standard” is ever worth the chance that those governments that want to control the market (which may include the U.S. in three months) will take away my choice as to what IT, or what size paper, or what size anything I can buy. 

But what’s bad for blogging in this news is good for IT investment planning and overall market freedom. Back to the beach book.

Here's betting Microsoft never saw this open standards front group coming

_{The European open source fascists are up in arms in the U.K. over the fact that a U.K. educational ‘group’ called Becta awarded a contract for an educational program to an educational consultancy rather than a software services consultancy. The rub is that the educational program is about providing educators a better understanding of the open source software (OSS) culture and development model. The EU open source fascists are apparently afraid these consultants will not inculcate the Brit school administrators with the right propaganda (luckily I don’t think any of these people get anywhere near the kids). The flap looks similar to the uproar last month when the One Laptop per Child (OLPC) education-oriented group, based in Cambridge MA, decided to do something for the kids rather than kowtow to the open-source-or-nothing crowd.}

 

_{On one side according to the UK tabloid websites Inquirer and Register are Red Hat (RHAT) and a distributor/partner called Sirius (distributes JBoss) and Canonical and a distributor/partner called The Learning Machine, a subsidiary of IRL Systems Ltd.  Both tried to win the Becta contract in question. It was awarded instead to a group called Alphaplus with no apparent software vendor relationships but with a history of working on educational projects with Becta.}

 

_{Somewhere in the middle is a couple of typical European open source/Open Standards front groups called the Open Source Consortium, whose president as is the usual case, is also the CEO of Sirius, and the Foundation for a Free Information Infrastructure (FFII). Both look a lot like the cast of characters behind Open Standards (always upper case) although the Open Source Consortium looks even more moribund than most of the Digistan crowd. Whatever urgent crisis precipitated the Open Source Consortium’s “let’s set up a web site and call ourselves a foundation” activity must have dissipated.  No direct connection between the Open Source Consortium and the other front groups is evident (but that’s the beauty of front groups). The FFII on the other hand is an active George Soros front group which appears to have some relationship to IRL. FFII is working strongly to remove free-market forces from government procurement, which is also a major goal of Red Hat.} 

 

_{On the other side are Becta and Alphaplus. I actually cannot figure out from its web site what Becta is. I cannot even find on the web site what Becta stands for but I am guessing the “e” is for education and the “t” is for technology. Becta appears to be a government-funded consultancy about technology in education although its press releases say it is a government agency.} 

 

_{Of course there is the obligatory “open letter” calling for boycotts and accusing the government of corruption and implying Microsoft (MSFT) complicity. It comes from the Open Source Consortium. The FFII has not checked in with its opinion. Actually the open letter does not appear on the Open Source Consortium’s web site but only in the press. This open group should be more open about its open letters and not make it so obvious that this is simply a publicity stunt over a lost contract.}

Some expert thinking on open standards vs. Open Standards, Microsoft and Java

I have posted frequently about the absurdity of the "worldwide Open Standards" movement in general and about the negative effect of Open Standards activity on shareholder value for the likes of IBM, Microsoft (MSFT), Red Hat (RHAT) and Sun (JAVA) in particular.

I always draw the distinction between Open Standards and open standards.  Open Standards is always written in propagandistic upper case by some small cell of individuals organized in a fluid amalgam of front groups (often also funded by the same public companies). Their activity is a throwback to all kinds of extremist activity in the last century, but presumably without the violence. Lower-case open standards, on the other hand, are just the market at work and are good for technology investors and users alike.

I also draw the distinction that open source and open standards are not synonymous although there seems to be a strong cultural connection to standards among open source community members. 

No one else seems to care much about this issue from an investment perspective, which is why we have blogs of course. But I was happy to see that a bona fida expert in both software development and building an enterprise that meets a payroll each week has at least thought the issue through. 

I am not suggesting he agrees with all my commentary but on the Open Source Initiative (OSI) web site's License Approval list (remember, there is no explicit link between open standards and open source), Brian Behlendorf opined that standardization best:

"... *follows* widespread innovation and implementation rather than trying to precede it.

"... the most successfully implemented interoperable standards in existance, are the ones we take for granted: TCP/IP, DNS, SMTP, and HTTP.  None of them required conformance as a license to implement or redistribute; non-conformant implementations are eliminated from the market because they provide inferior service."

He doesn't need me to make his bona fides but just in case the name is not familiar, Behlendorf co-founded CollabNet, a likely--in my opinion--future open-source-based IPO. The company provides tools and services for IT developers and adminstrators. Before launching CollabNet, Behlendorf ran a Web design and engineering consultancy while he co-founded and contributed heavily to the Apache Web Server Project, co-founded and supported the VRML (Virtual Reality Modeling Language) effort, and assisted several 'open standards' working groups, particularly the HTTP standardization effort. Behlendorf is currently a Director of the Mozilla Foundation and is a retired Director and President of the Apache Software Foundation. He's listed as Board Emiriti at OSI.

In addition to his opinion on standards, investors might want to look to the linked opinion for what he thinks about the past of Java and the future for Microsoft vis a vis the Open Document Format.

Google, IBM, Red Hat, Sun and "the great left-wing conspiracy"

Another anti-Microsoft (MSFT) front group has emerged in favor of “free and open standards,” hyping what it calls the Hague Declaration and making some absurd connection to the Universal Declaration of Human Rights. The propagandists, partially funded by publicly traded companies, have a little trouble describing what that term “free and open standards” means (or even using it consistently) but the group has no trouble indicating its political stripes. Unbelievably it calls itself Digistan, apparently to indentify with the fascist terrorists based in countries and regions using the Farsi-based suffix “stan.”

All of these front groups percolate around about two dozen individuals, mostly European. The vast left-wing conspiracy of George Soros works around the edges of their mostly web-site-only organizations. But there is a profit motive. Some seem to exist to raise money from public companies in order to hold conferences at excellent venues. Others run consulting companies to advise governments how to follow “free and open standards” or law firms that write licenses that follow “free and open standards.” Only if these lefties could be time warped back to the last century so that they could ‘fight the right’ in Spain (or sit in the Les Deux Maggot and talk about fighting the right in Spain). Then the rest of us could avoid having our tax dollars wasted and our share values diminished.

Digistan claims it has only individuals, not businesses or organizations, as members. But looking at the founders’ affiliations illustrates that the group goes right back to the same Microsoft-competitor-based organizations that are trying to manipulate free markets via government intervention around the world. Like many of the other anti-Microsoft organizations related to these same individuals, Digistan was likely created for some “critical” current event that only the founders recognize as critical and will fade away when that event passes All the while the shareholders of IBM (IBM), Red Hat (RHAT), Sun (JAVA) and others are seeing their share value diminished by every dollar wasted on donating to them or sponsoring their events.

Digistan was launched thanks to a grant from the Information Program of Open Society Institute (the George Soros connection) and matching grants from OpenForum Europe and the European Software Market Association. The latter does not list its sponsors but the former is the front group behind other front groups like NOOOXML and Document Freedom Day (that’s right--it’s all the same bizarre cast of characters back again to waste your money). The OpenForum Europe's events, as well as possibly the organization itself, have been sponsored by Google (GOOG), IBM, Red Hat, and the ODF Alliance (which of course is closely tied to Sun because ODF--the Open Document Format--is Sun’s document format standard).

If it wasn’t for the implied association with terrorism it would be funny.

At IBM, Open Standards matter more than open source

IBM (IBM) recently briefed a group of analysts on what it calls its “cross-brand” open source development and marketing activity. That characterization makes the point that open source is as important to the IBM Lotus, information management, and Tivoli brands and products as it is to the WebSphere, Rational and operating system brands and products with which open source is typically associated. At the 30,000-foot level, I took away some good news and some bad news.

Here was the good news. At IBM, the use of the open source software (OSS) community and development model is all about increasing market cap. It’s not altruism. It’s not something for some developers to do 10% of their time like Google’s (GOOG) tithing for technology. It’s not an ad slogan or a manipulation of OSS terms and conditions (Ts&Cs). Most important, it’s not a strategy, it’s just a tactic.

This good news is not new news; it reinforces past IBM direction. But it is always good to hear it spelled out so clearly by top level managers, “cross brands” as IBM says. You can see OSS now in WebSphere, Lotus, Tivoli, Rational of course (the Eclipse Foundation), Linux and now information management (with the late March 2007 investment by IBM in EnterpriseDB). Ten years after beginning to employ OSS as a tactic with the decision to bundle the Apache HTTP server into WebSphere (in order to overcome an early Netscape lead in the web server software market), the open source tactic is paying off. My research says IBM is doing—conservatively—as much OSS-related business as Red Hat (RHAT). And the OSS development model clearly helps on the expense side as well.

Here’s the bad news: There is an IBM strategy behind “next gen open source” and they call it Open Standards (always upper case). In the Lotus market, IBM managers appear to be betting a lot on international approval of Sun’s (JAVA) open document format. There are also many other de jure standards efforts to which IBM pays a lot of attention.

I could not disagree more with the strategy. I'd rather see more time spent making appropriate IBM technologies lower case standards. Open Standards (always upper case) are an artificial market manipulation that has either no effect or no lasting effect. Even worse is when the Open Standards are combined with politicians. The use of Apache mentioned above from 1997-1998 is a better example for IBM to follow. IBM (and Oracle’s) early adoption of Apache illustrated how standards (lower case) change market dynamics quickly and positively for the company that acts on them. The years of meetings in Geneva can follow once the market has blessed one widget facet or another (or blesses more than one widget facet). Typically these are functions on which users are not going to make buying decision anyways.

But for more than my 40 years in the business, if The IBM Company (back in the day, it was always pronounced upper case) says something is so in the information technology market, I have to think long and hard about betting against it. I think the Open Standards strategy, although apparently being driven by the IBM Software Group probably has a lot to do with what we called the services strategy in our 2007 annual review of IBM.

-- Dennis Byron

Microsoft: Did you think this whole OOXML thing was over?

Unfortunately, despite the April 2 press release from the International Standards Organization (ISO) reporting that the ECMA/Microsoft (NASDAQ:MSFT) standard for document formats, popularly known as OOXML, has been voted in, we now start a 60-day period when appeals can be filed. After one is filed (is there any doubt?), the appeals process can go on for many additional months, and through four levels of the ISO.

What are typical grounds (quoting from ISO rules:)

11.1.2 A P-member of JTC 1 or an SC may appeal against any action, or inaction, on the part of JTC 1 or an SC when the P-member considers that such action or inaction is:
• Not in accordance with these directives; or
• Not in the best interests of international trade and commerce, or such public factors as safety, health or environment.
11.1.3 Matters under appeal may be either technical or administrative in nature. Appeals on decisions concerning NPs, CDs and DISs are only eligible for consideration if:
• Questions of principle are involved;
• The contents of a draft may be detrimental to the reputation of IEC or ISO; or
• The point giving rise to objection was not known to JTC 1 or SC during earlier discussions.

Does all this hogwash in bold sound familiar. Were Google's (NASDAQ:GOOG), IBM's (NYSE:IBM), Red Hat's (NYSE:RHAT) and Sun's (NASDAQ:JAVA) executives and lawyers building the record for appeal all along with their rabble rousing of the blogosphere?

What a collosal waste for shareholders for all companies concerned.

-- Dennis Byron

For Microsoft, there is more than one way to skin a standard

I don’t think de jure standards (so-called international Open Standards) of any type have any particular meaning in the real world. In information technology [IT] markets at least, most so-called international Open Standards (always upper case) are retroactive acknowledgements that some particular facet of a widget is already the most popular widget facet of that type in the market. For more detail, see my more than 30 years of IT market research on CORBA, 88 Open, Ethernet, OSF, the seven layers of the Open Systems Interconnection model, PARS, SQL, X-Open, HTML, blah blah blah, blah blah blah. The acronyms you recognize were popular first, then made standards.

Also in real-world IT markets at least, some smart guys come up with a workaround long before a standards body can find its gavel… if the market demand is there. So investors should note that whether or not the ECMA and Microsoft (MSFT) are again denied International Standards Organization (ISO) fast-track approval of their Office Open XML (OOXML) standard on March 29, the pair is just going to keep on trucking down the real-world popularity road to standardization. And they are going to use the king of open source organizations, the Apache Software Foundation, to help them do it.

Microsoft and Sourcesense, a European open-source-oriented systems integration consultancy, have announced that they will move Microsoft-Office-based open source solutions to market by contributing to the new version of Apache’s POI. According to Wikipedia, POI stands for "Poor Obfuscation Implementation" referring to the fact that the “old” Office file formats (.doc, .xls) seemed to be deliberately obfuscated, but so poorly that they were successfully and quickly reverse-engineered so that Java programs could talk to Office. Currently only a working copy of POI supports new Office (that is, OOXML) file formats but the POI community expects this support to make it into a full release by June-July 2008. To make that happen, Microsoft and Sourcesense are going to help. Sourcesense brings experience in catalyzing other Apache technologies and open source development practices. Microsoft obviously brings its knowledge of the 6000 pages of the OOXML spec.

By email, I asked Gianugo Rabellino, CEO of Sourcesense if he wasn't afraid he'd be set adrift in the middle of the Mediterranean in a rubber dinghy for consorting with the enemy, given that we're constantly told here in the U.S. that all of Europe is totally against OOXML. His kind response: "providing OOXML support for the same functionalities (as previously provided for earlier versions of Office) is a logical step and something that the POI community might have decided to add anyways at a certain point in the future: doing that in collaboration with Microsoft looks like a good step in the right direction, both for Microsoft and Open Source." Bravo!

So ISO standard or not, it will soon be as easy for Java software to move information to and from Microsoft Office 2007 as it is for the same software to move information to and from Office 2003 and earlier versions of Office. OOXML, although it has only been actively marketed for a little more than a year, is quickly becoming as popular—depending on how you measure such things—as the leading ISO standard document format, Adobe’s PDF (relative to when PDF was anointed an ISO standard). The POI relationship will only hasten that acceptance.

-- Dennis Byron

Open Standards; Open Wallet: The real Massachusetts story about Sun/IBM ODF and Microsoft OOXML

One of the biggest scams on the Internet is the deception that Massachusetts state government is an early adopter "Open Standards" state. An otherwise good March 14, 2008 InfoWorld story about the Microsoft (MSFT) Office Open XML (OOXML) software developers kit by senior editor Ephraim Schwartz reminds me that knocking down the story is a never-ending task. Schwartz, despite reporting in his own magazine to the contrary, apparently reflexively repeats the conventional wisdom that Massachusetts has "already made (its) decision in favor of Open Document Format (ODF)." Surpringly to me, when I asked him to check his sources, he cited two-year-old techtarget and CBR stories rather than his own reporter. Even if he corrects his story, as he should, it has been syndicated a dozen times over the weekend and repeated a hundred times by the anti-Microsoft blogoblatherers. The deception continues to spread.

So, one more time: Massachusetts has not made a "decision in favor of ODF." It's not true today. It never was true.

Here's what really happened (check the documents themselves at the links provided if you prefer):

1. In 2005, one department in one part of one branch of Massachusetts government--called the Information Technology Division (ITD)--issued, possibly illegally, a document which said that the state would only use documents produced in the following four "standard" formats: HTTP, ODF, Adobe PDF (it was not an ISO standard at the time) and TXT. Separately ITD said this policy would go into effect beginning in 2007

2. The multiple-year process that led up to this four-format (not ODF-format) proposal began in 2002 with a study most likely orchestrated by ITD and conducted by IBM (IBM) for an advisory commission that included a Sun (JAVA) employee but no Microsoft employee. Sun is the inventor of ODF; IBM uses ODF in one of its less popular Lotus products. Microsoft was a major supplier of technology to the state at the time and should have been included on the commission (or all vendors should have been barred).

3. Almost immediately after the ITD mandate was released, a Massachusetts legislative committee intervened informally to stop the ITD four-format mandate from being adopted. In July 2006, this same legislative committee formally issued a report entitled Open Source, Closed Government. (Note: the committee accurately describes the difference between open source terms and conditions and Open Standards in its report. I do not know why it chose to title its report as it did.)

The legislative committee found that a few state officials in ITD:
-- Ignored processes relative to government transparency (for example, issuing the offending policy for public comment a few days before the summer-ending long Labor Day holiday and making it final a few days after that holiday, decreasing the public comment period dramatically)
-- Ignored the comments and positions of many other effected departments and branches in state government (particularly those responsible for state records),
-- Ignored for three years legislative demands for cost/benefit analyses, taking into account total cost of ownership, of the implications of implementing only the four formats to the exclusion of the Microsoft "standard" and
— Most disturbing—ignored the legally blind, the hearing disabled, and others that would be unable to deal with state government under the ITD proposal. The proposal would have also caused difficulties for thousands of disabled state employees.

I’d like to think the actions of this legislative committee was democracy at its finest. But you can’t jump to that conclusion (particularly since the committee took more than 2-1/2 years to issue its Open Source/Closed Government report, which gave the Open Standards blogosphere the time needed to spread the deception to which Schwartz fell victim last week). Rather than good government however, it is just as likely that Microsoft simply caught up with IBM's and Sun's five-year headstart in terms of legislative lobbying capabilities.

Whatever the reason, no Open Standards agenda has been foisted on us here in the Bay State. In 2007, Massachusetts added OOXML to the list of "standard" formats in its Open Formats category (as soon as OOXML was accepted by the ECMA International) and in fact now downloads documents off its website in Microsoft Real Text Format (RTF).

Investors need to care about this because Sun, IBM, Red Hat (RHAT) and others continue to try to achieve via legislation and government edict market position that they are unable to achieve in the free marketplace. Even if you agree with IBM/Sun/Red-Hat approach (it's not illegal or immoral), you need to build its implications into your investment research models. It adds considerable upfront cost to these companies' sales and marketing efforts with very little promise of return on investment.

I even believe Microsoft is wasting its shareholders' money in fighting IBM, Sun, Red Hat and the others, by either lobbying governments or lobbying so called "international standards groups." My research findings have consistently shown that "official international standards" do not affect the market. The outcry here in Massachusetts by other state employees and the disabled against the overreaching of a few anti-Microsoft staff people in ITD seems to bear that out.

-- Dennis Byron