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In an interesting San Francisco Chronicle interview, Robbie Bach, president of Microsoft’s entertainment and devices division, reveals in no uncertain terms how pleased the company is with Zune:

Q: How is the Zune business going?

A: We’re actually super-pleased at where we are. When you talk to people, customer satisfaction is somewhere north of 90 percent. We think we’ve got a product that is very strong. You’ve seen that strength in some of the new ideas that we are trying, things like Zune Social, where we have over 2 million people who are on the Zune Social site, who are sharing their playlists with other people, letting people experiment with what they are listening to, letting people see their top 10 list and creating a social experience around it.

If you look at actual sales, depending on the month, we’re No. 2, sometimes No. 3. It goes back and forth. It’s a good solid share. We’re not clipping at the heels of Apple just yet in the market share space. But that’s something that will evolve over time.

I’d be interested in our readers’ impression of how Zune is doing:

1. Should Microsoft be “super-pleased” with Zune?
2. Do products with 90+ percentage satisfaction ratings result in an on-target outfit like GameStop to discontinue selling Zunes due to “insufficient demand from customers”?
3. Is Zune a “very strong” product?
4. Is Zune’s market presence a “good solid share”?
5. Is Zune capable of “clipping at the heels of Apple” in market share over time?

Bonus questions:

1. Bach: “We will outsell the iPhone. We will outsell the BlackBerry.” Do you believe him?
2. Bach: “We don’t make phones ourselves. We don’t have any plans to make phones ourselves.” Do you think Microsoft will or will not get into cellphone hardware business?

I’m not even going to bother asking the awkward question as to why Robbie Bach is still employed at Microsoft, because that wouldn’t be fair…to MSFT shareholders.

Last February, with great fanfare Wal-Mart introduced its same-day-as-DVD video download service, as covered by the New York Times:

Wal-Mart Stores may have lost the online DVD rental battle, but it has no plans to lose the higher-stakes video downloading war.

Wal-Mart’s video download site will offer movies and television shows. The new service enters a field already crowded with competitors.

Today the company will introduce a partnership with all of the six major Hollywood studios — Walt Disney, Warner Brothers, Paramount, Sony, 20th Century Fox and Universal — to sell digital movies and television shows on its Web site (www.walmart.com/videodownloads), becoming the first traditional retailer to do so.

The move plunges Wal-Mart into competition with several established sites, like Amazon.com, CinemaNow and iTunes, and given the chain’s penchant for price cutting, could drive down the cost of a digital download.

In less than a year, on December 21, 2007 with the “Beta” tag still attached, the service was shuttered :

Why did the nation’s biggest retailer, whose recent slogan dress-up betrays a larger ambition beyond low prices, fail so quickly and decisively?

It never had a chance. Sure, the usual suspects — AAPL shorters and iPod/iTunes/AppleTV-killer merchants — thought this would be a “game changer” but that by now has become background noise.

There are myriad reasons why Wal-Mart has failed. The company had already closed its DVD rental site before it tried downloads. So it should have had plenty of lessons learned, especially in a fractured market with so many me-too, iTunes-killer services creating endless confusion for customers. It could also be argued that Wal-Mart just didn’t want to eat into the steady profits from its physical in-store DVD sales business.

At the end of the day, however, it comes down to one factor: Wal-Mart didn’t have competency in this business, and worse, didn’t quite figure out how to acquire it. While supply chain management and low prices are Wal-Mart’s forte, technological ingredients of digital downloads, to say nothing of the business end of branding and marketing the service, are not.

Companies that are good in one area often make the mistake of assuming that the formula that has been successful for them previously could be adapted to another market for a similar affect. Dell, for example, also fell for the very same delusion by assuming that its competencies in direct sales, supply chain management and low prices would translate into domination in digital players. Unfortunately, Dell DJ Ditty, the iPod-killer, was killed in about a year.

Wal-Mart thought that what it lacked in core competency can be outsourced. It chose HP Video Merchant Services introduced a year ago with 30 licensees:

HP Video Merchant Services provide efficient aggregation, merchandising and fulfillment of commercial video content, enabling retailers to address the growing consumer demand for greater selection of titles, improved online shopping experiences and multiple media formats…HP’s manufactured-on-demand DVD service is used to produce a DVD of any movie, TV show or other video content regardless of niche or obscurity in much smaller run quantities than would be economically viable for traditional DVD replication.

HP’s video platform prominently showcased the Wal-Mart “Success story” at its website. In an act of sheer embarrassment, the “Success story” was still available even after HP decided to shutdown the service. HP said paid video services did not perform “as expected.”

Wal-Mart relied on HP for the download service, the six major movie studios for the content, Microsoft for the IE web browser and DRM, and hardly anyone for branding, marketing or customer service. Why the world’s largest retailer thought this was a winning formula is still a mystery, one that applies to a frightening number of companies that prove to be all too ignorant, arrogant or incompetent.

In a frenzy to catch up with Apple, the industry hasn’t learned much from the PlaysForSure debacle by watching Microsoft abandon its own DRM and introduce Zune with a new and incompatible system to compete directly against its erstwhile digital music “partners.” In another instance of mortgaging success to others’ willingness or ability to innovate, AOL recently moved its struggling video service to Amazon Unbox which in turn is based on Microsoft’s PlaysForSure.

The irony here is that Wal-Mart relied on HP that relied on Microsoft and AOL relies on Amazon that relies on Microsoft which itself no longer relies on its own PlaysForSure. When a core component of a product or service depends on the rate of innovation of another party over which you have no control or influence, it’s time to rethink strategy. It’s also time to ask yourself, twice or thrice removed from core competency, should you really be in such a business?

UPDATE: It turns out Wal-Mart actually thought about the impending implosion of their download service and fingered the culprit. From an interview last month in the New York Times, Raul Vazquez, chief executive of Wal-Mart.com:

This has been in beta. We want to understand what the customers want. And I think what we learned is that the initial experience of buying and downloading content needs to be better. We thought it was going to be easier for the customer to understand.

Yes, it’s the customer’s fault.

In Why enterprise software isn’t sexy Robert Scoble writes about Bill Gates’ frustration with the lack of coverage given by blogs and reporters to enterprise software:

Even in the Wall Street Journal, and you think, oh, this is the paper they’re going to tell me about business computing; no, it’s all about consumer computing.

In enterprises all over the world, there must be millions of programmers writing enterprise software and untold others interacting with them. However, if actually understanding the scope and depth of enterprise software were to be a requirement for blogging about the subject, there would be a frighteningly miniscule fraction qualified to do so. Anyone who hasn’t been around a decade or so would be immediately ineligible, for lacking all important historical perspective if nothing else.

In turn, those who have been around often expediently erect walls of authority and accuse others of being unable to understand the complexity of creating and maintaining enterprise software.

There’s of course plenty of confusion about what’s usable, useful and sexy, but those who defend what amounts to inherent complexity of enterprise software support an underlying assumption: it’s acceptable that people who are daily exposed to high interface and interaction values inherent in TV, movies, advertising, magazines and gadgets in the consumer sphere are somehow rendered incapable of expecting and appreciating the same within the walls of the enterprise from 9 to 5.

This is understandable in that while consumer consumption is about personal choice, enterprise workers almost never get to choose or, just as importantly, personally pay for the software they use. If they did, we surely would not have had, for example, ghastly “enterprise-grade” mobile device software that has been “servicing” the industry for over a decade…until the birth of the iPhone.

It’s a daily spectacle to watch iPhone toting CEOs telling their IT departments to make their phone work with their company’s enterprise systems. The only ones who may not appreciate the irony in the world’s biggest maker of business management software introducing SAP CRM 2007 to run on the iPhone – the sexiest consumer device around – are in fact the defenders of enterprise legacy. SAP senior vice president Bob Stutz:

“The iPhone has become such a popular thing…Everybody wants the ease of use of the iPhone.”

The New York Times quotes Stutz saying that “SAP decided to introduce the iPhone software ahead of programs for other devices at the request of its sales people, saying they prefer using iPhones to the other devices.”

We know what’s sexy in the consumer world. I have no doubt that given half a chance consumers who go to work from 9 to 5 in the enterprise and those who access enterprise software from outside would want radically better and sexy software just as well.

Instead, this is what they get:

• Legacy mainframe apps whose caretakers are unwilling or unable to abstract the UI through a rich and flexible web interface to hide complexity, what some call “incremental SOA,” aren’t sexy.
• Strategists who regard scalability as mere capacity enhancement without understanding who uses their software and how aren’t sexy.
• Those who don’t understand that iTunes Store, Google or Amazon are some of the largest enterprise applications on the planet despite supporting consumer-level access aren’t sexy.
• Enterprises who compel users to download multi-megabyte, single-OS, thick-client software for tasks that even the iPhone’s web browser could handle without much fuss aren’t sexy.
• Those who advocated running the enterprise through the desktop by devaluing the web browser for half a decade, even if they admit it now, aren’t sexy.
• Businesses that still think that subjecting their customers to endless paper and digital form filling is a sexy form of information gathering and circulation aren’t sexy.
• Financial enterprises that believe in creating hyper-efficient, but siloed loan origination systems without tightly coupling them to risk analysis systems, thereby writing off over $50 billion industrywide aren’t sexy.
• Software architects who still have their business logic scattered all over UI objects, web pages and stored procedures aren’t sexy.
• Those OS architects who neglected security at the altar of features and gave several hundred million users a decade-long agita aren’t sexy.
• Those who believe the best way to bring “business intelligence” to executives and masses alike is through uninformative 3D dashboard gadgetry aren’t sexy.
• Those who think UIs to end-points of enterprise service systems can be done by Soviet-era Bulgarian freight train engineers aren’t sexy.
• Those who have convinced themselves that the user interface isn’t the application aren’t sexy.

So yes, Bill Gates is absolutely right that we all should pay far more attention to enterprise software. Only then will we learn just how much work is needed to strip away layers of mindless complexity in Microsoft’s own SharePoint, BizTalk and others, to finally render them…sexy.

In yesterday’s Runtime wars (1): Does Apple have an answer to Flash, Silverlight and JavaFX?, we surveyed the primary contenders for rich-media, cross-platform application delivery: Flash, Silverlight and JavaFX. And wondered if Apple has an ace up its sleeve.

Apple’s options

Thanks to the surging popularity of Mac OS X and the iPhone, other companies are already bringing their plugins to Apple’s platforms, so the company may feel no urgent need to reinvent the wheel on Mac OS X. With Core Image, Core Animation, Core Audio, QuickTime and Cocoa, Apple’s desktop platform is not exactly a rich-media desert. Most of those capabilities are carried over to its post-PC devices AppleTV, iPhone and iPod touch via Mac OS X, so doing nothing may be one alternative.

Another “Apple should really…” item that refuses to die is the porting of core Apple media technologies to (at least) Windows, with a runtime for Cocoa. The “Yellow Box for Windows” which would have made write-once, deploy-anywhere possible still remains a dream of Cocoa developers.

Yet another option is #1 in Apple fans’ perennial Top Ten wishlist: buying Adobe (for Flash). This one’s quite unlikely, even during a week when Adobe’s CEO just called it quits.

Finally, Apple may choose to leverage an open source project such as OpenLaszlo, capable of outputting to multiple runtimes:

Core X

Of course, Apple could also be hard at work creating a brand new platform that integrates its Core X technologies into a new cross-platform runtime.

One huge barrier to that approach is distribution, however. It’s easy for Microsoft to distribute Silverlight through its OS monopoly. Flash, which Adobe claims is on 98% of desktops, has an unrivaled uptake rate for upgrades. Sun has close relationships with mobile device manufacturers and carriers and Java already runs on hundreds of millions of phones. While Apple claims 500,000 iTunes downloads and QuickTime is also on a lot of Windows desktops, it would still be a very difficult hurdle to get a new runtime on a broad range of platforms at this juncture. Yes, if the new platform is unambiguously superior it could happen, but Apple is coming way behind in this race.

So what then is Apple’s most sensible option? When in strategic doubt, resort to the famous stratagem devised by Odysseus.

Apple’s Trojan horse

Apple has been pretty good with the Trojan horse strategy, leveraging a few key assets (even when regarded as being late to the party) into domination in digital music, for example, and it’s trying the same with the iPhone in the mobile convergence space.

Apple’s Trojan horse in multi-platform, multimedia runtime is a piece of open source technology that’s already on Windows, Mac OS X, Linux, Adobe Flex/AIR, iPhone, iPod touch, Nokia S60 smartphones and Google’s new Android/Open Handset Alliance, with 30+ partners around the globe: WebKit 3.0.

WebKit has come a long way since Apple’s adoption of the open source KHTML rendering engine and KJS libraries from KDE. A flurry of recent additions to WebKit by Apple and WHATWG now include:

• Client-side storage via SQLite (bundled by Apple in Tiger and Leopard, but also used as a persistence layer by Google Gears and Adobe Flex) lets WebKit-based browsers store structured data locally.

• Enhanced Rich Text Editing has been a problematic area for Safari for a while, especially with Google Docs, GMail and blogging apps. WebKit 3 solves that in an elegant way by providing a fully functional rich-text editing context activated by a simple click on the editable text:

• Downloadable fonts let designers specify downloadable custom fonts via CSS @font-face rules.

• Style-able form controls are now possible via CSS specification in WebKit 3:

• Advanced CSS styling ushers in multi-column text layout, text stroke and shadow, border-radius and shadow for box effects, among others.

• Faster JavaScript and DOM parsing in WebKit 3 is said to be 2X or more, thereby speeding up rich-media applications.

• New and faster XML technologies in WebKit 3 include XPath, the W3C standard XML Path Language that lets Ajax/CSS developers query document elements more efficiently, as well as XSLTProcessor, DOMParser, XMLSerializer and much improved XMLHttpRequest.

• Scalable Vector Graphics (SVG) support for graphical presentantion and interaction via XHTML in WebKit 3 is shaping up to be the fastest among browsers. Although its rich potential has not yet been fully realized, SVG gets an opportunity to ride on the coattails of WebKit to tackle a range applications where only Flash could have been considered until now. Here’s a Mac OS X Dock-like magnification animation in SVG (WebKit 3 required for interactivity):

• CSS animation is a way of specifying animation via CSS, with transition properties like duration, timing, opacity, etc. Safari and WebKit architect Dave Hyatt promises even more:

In future posts I’ll go into transitions in more detail and also talk about another feature we’re adding: explicit animations. We are also preparing a more detailed proposal (full of intimidating spec language) that covers our thoughts on transforms, animation and other advanced visual effects.

• CSS Transforms take a page out of currently available JavaScript effects libraries to enable boxes to be scaled, rotated, skewed and translated, with timings for fades, rotation, expansion, collapses, etc. Hyatt:

…transitions are for basic implicit animations. We will also be introducing explicit animations (using actual “animation” CSS properties)…We are exploring ideas for how to do transforms in ways that could affect layout.

• HTML5 <audio> and <video> allow extremely simple media embedding in WebKit, with bi-directional JavaScript control:

<video src=sample.mov autoplay></video>

There are other additions and improvements to WebKit as well. As you can see by now, WebKit is no longer your dad’s browser. Bit by bit, it has been gaining rich-media capabilities and Apple appears to be in no mood to slow down.

Renderer on steroids

WebKit architect Hyatt outlines future directions:

Like Microsoft our engine is also used inside many applications on our home operating system. We serve two masters: the Web and OS X (in all its forms). If people need these capabilities on OS X, we are going to provide them, regardless of whether or not they end up in any specification. That said, we are very interested in standardizing this stuff, and are preparing a proposal for the folks at the CSS WG.

Also, CSS has a well-documented means of providing safe non-conflicting extensions (using vendor-specific prefixes), so there is absolutely nothing wrong with CSS extensions. This isn’t like HTML, where you end up polluting the namespace. CSS can actually be extended safely in a way that doesn’t conflict with the standards.

While Apple’s ability to set a new rich-media standard may be limited, with the open source WebKit, even competitors like Nokia, Adobe and Google are helping the company achieve its primary goal of establishing a stable and ubiquitous platform from which it cannot be strategically excluded. That’s some Trojan horse!

Is WebKit as rich and powerful as Flash, Silverlight or JavaFX? No. Certainly not today. But it’s an extremely cost-effective way for Apple to have a pervasive rich-media platform whose future it can certainly affect.

A richer version of WebKit in the near future will have a commoditizing effect on Flash, Silverlight or any other proprietary platform. Remember Apple makes money mostly by selling iPhones, AppleTVs, Macs and related services. To the extent that these devices can have access to non-propriatery runtimes, not controlled by competitors like Adobe or Microsoft, Apple would be happy to sponsor open source development, as it’s doing with WebKit.

Where to next?

Perhaps next on Apple’s agenda is beefing up its development tools for WebKit. WebKit Inspector, a sophisticated development tool to navigate and debug web apps, is already out, as is Drosera, WebKit’s JavaScript debugger. Web Clip, a seemingly simple but extremely user-friendly tool, lets non-programmers create dynamic subscriptions to a selected portion of a web page as a Dashboard widget in just a couple of steps. Here, for instance, a 48-second video of YouTube “videos being watched right now” area turned into a Dashboard widget with a single click, with the widget capable of playing selected videos without going back to a browser, all thanks to WebKit:

Of course, Dashboard widgets are themselves rooted in WebKit and Dashcode greatly simplifies the creation of these small apps. It’s not out of the realm of possibility for Dashcode or a more professional tool to eventually grow into something closer in capability to Adobe Flex Builder or other IDEs based on Eclipse.

WebKit: an open-source, license-free, rich-media capable runtime…on desktops, TVs, phones and all manner of convergence devices to come. Could it be that when Steve Jobs introduced WebKit as the way to develop for the iPhone, he actually meant to signal its future direction?

UPDATE: Today, Apple updated WebKit’s Web Inspector, with a few new features including inline CSS editing and downloaded font previews elevating it closer to a web application IDE of sorts.

Runtime competitors were outlined in Part 1:
Runtime wars (1): Does Apple have an answer to Flash, Silverlight and JavaFX?

Adobe’s got Flash, Microsoft Silverlight and Sun JavaFX. What does Apple have in this multimedia runtime war of information and entertainment delivery?

On the surface, nothing. Some might argue that QuickTime is already the answer; Flash and Silverlight are finally catching up. Further, if Apple can convince Google’s YouTube to re-encode their video inventory in QuickTime’s primary codec H.264/AVC and if the new Flash player will also feature the industry standard H.264, why bother with anything else?

Because more than just video is at stake here. Surely, both Silverlight and the latest Flash offer high-resolution video, but they also deliver (rich media) applications.

Adobe Flash

Adobe, for example, can deliver the core of a reasonably non-trivial application targeting Flash runtime intact across platforms to web browsers (Flex), desktop (AIR) and even mobile devices (Flash Lite). Ditto, eventually, for Silverlight and JavaFX.

Microsoft Silverlight

Microsoft’s Silverlight can not only play HD 720p video but also includes CoreCLR, the .NET Common Language Runtime, so that applications can be written in any .NET language and run on Windows, Mac OS X and soon Linux. While Silverlight can be seen as an extension of Windows Presentation Foundation, a .NET 3.0 layer, it also supports fast compiled/just-in-time JavaScript and Ruby, Python and VBx.

Sun JavaFX

Not to be outdone by Adobe and Microsoft, Sun recently introduced JavaFX, JavaFX Script, JavaFX Mobile. Based on Java, these technologies cover nearly the same domain as Flash and Silverlight.

Powerful runtimes

This new breed of network-aware platforms are capable of interacting with remote application servers and databases, parsing and emitting XML, crunching client-side scripts, rendering complex multimedia layouts, running animations, displaying vector graphics and overlaid videos, using sophisticated interface controls and pretty much anything desktop applications are able to do.

It is said that Adobe bought Macromedia to acquire Flash, whose runtime is likely the most ubiquitous plugin on the web. Fairly effortless to upgrade, the Flash runtime is a tremendous asset for Adobe and Flash/Flex/AIR developers to distribute their rich media applications.

Indeed the absence of Flash on the iPhone has been one of its most talked about shortcomings. Everyone expects Flash to arrive soon. Walt Mossberg at All Things Digital had said in July that the iPhone Flash plugin was imminent:

Apple says it plans to add that plug-in through an early software update, which I am guessing will occur within the next couple of months.

Yet four months and a couple of updates later, there’s no Flash support. Nor any support for Silverlight or JavaFX on any of Apple’s post-PC devices: AppleTV, iPhone and iPod touch. Is there more than the current absence of an SDK involved here? Mere Apple secrecy? NIMBY? Is Apple satisfied by merely having them on Mac OS X and not worried about its post-PC devices? Or does Apple have something up its corporate sleeve to counter this tsunami of powerful cross-platform runtimes?

The answer is in “Runtime wars (2): Apple’s answer to Flash, Silverlight and JavaFX,” here tomorrow.

A longer discussion on Core Animation and its significance is in:
What’s in Leopard for Designers (1): Core Animation