Suppose you were the CEO of Apple in 2005 when a couple of intergalactic visitors with time-warping technology offered you this bet:

Design and manufacture a small mobile device that seamlessly combines the functionalities of a cellular phone, a web surfer, an audio/video player and a small PC, and your company will double its market cap and establish a third mass-market computing platform after Windows and Macintosh.

Would you take it?

Before you say, “Are you nuts, why wouldn’t I?” ponder just a few of the issues involved:

1. It won’t be possible to enter this market quietly or modestly and hope to grow slowly (like with Xserve a few years earlier). Yours will have to be a blockbuster entry. You are good in raising awareness and expectations around a product but that raises the consequences of failure exponentially.
2. If you fail, it would be a public fiasco of the first order, likely lopping off at least a third of your market cap and seriously eroding financial sector confidence in your company’s ability to grow and diversify beyond the Mac and the iPod businesses.
3. You will have to enter a highly-regulated, highly-contested, large-scale and capital-intensive industry of established players with deep pockets that you have never been involved with.
4. You don’t have an operating system designed for mobile devices and adopting someone else’s OS doesn’t make business or technical sense.
5. You’ll have to solve a very long list of vexing technical problems for mobile devices including power management, radio efficiency, miniaturization, storage, display, CPU utilization, multi-tasking, cloud computing, advanced graphics, data/sensory input, etc.
6. While you’re beginning to appreciate logistic and component pricing advantages on volume-based products like the iPod, you won’t have similar advantages with this device especially at the start and against players like Nokia that sells hundreds of millions of units around the world each year.
7. You may have thought dealing with music labels wasn’t much fun, now try changing handset acquisition and revenue sharing models of entrenched and oligopolistic carriers here and abroad to an extent never tried before.
8. You may think Jonathan Ive can easily design the hardware, but you’ll have to invent a stunning UI and a truly innovative interaction paradigm so that it’ll give you at least a two-to-three year competitive cushion against other players, as you will surely need it.
9. This device will likely require a bunch of proprietary service and content components (maps, email, media, games, etc) beyond your core competency, requiring lengthy negotiations and strategic partnerships.
10. In order to create a sufficiently large and attractive platform you’ll have to entice developers with an array of inexpensive development tools and create a highly-lubricated marketplace unlike any other.
11. As with the iPod, you’ll have to sell this device to a mostly Windows-oriented world.
12. In order not to be quickly marginalized, you’ll have to distribute the device in most countries around the world, even where you have little or no Mac or iPod penetration.
13. If you want to achieve iPod-scale (and you must) you’ll have to implement and operate a different, dedicated and larger sales and support network on a global basis.
14. Clearly, this is a bet-the-company move and the anti-Apple brigades are ready and armed.
15. Incidentally, you’ve recently been diagnosed with pancreatic cancer.

Often, the anything-but-Apple choir doesn’t quite appreciate the immensity of the risks Apple took with the iPhone.

So it’s 2005, will you still take the bet? Steve Jobs did:

In an interview with The Financial Times yesterday, Verizon CEO Ivan Seidenberg had this to say when asked about the competition posed by Apple’s iPhone:

“It’s very cool. And Steve Jobs eventually will get old… I like our chances.”

That’s got to be one of the most indelicate utterances by one CEO regarding another.

Mr. Seidenberg is about a decade older than Mr. Jobs, so he can’t possibly be referring to his age with the most unfortunate “Steve Jobs eventually will get old” phrase. He must be referring to Mr. Job’s frail appearance at the Apple WWDC in June.

Apple said Mr. Jobs was suffering from a “common bug” but various pundits and AAPL shorters claimed it was due to his recent brush with pancreatic cancer. Nobody outside of his immediate circle really knows what may or may not be medically worrisome with Mr. Jobs, but why would a competitor’s CEO feel the need to raise it so brazenly?

This chart covering the period from Mr. Jobs’ cancer diagnosis in October 2003 to the present might give a clue (red: Apple, blue: Verizon):

What’s peculiar is that Apple doesn’t directly compete with Verizon: the former is the maker of the iPhone, the latter is a carrier. The competitor Verizon should actually be worried about is AT&T, Apple’s iPhone carrier partner in the U.S.

What should really concern Verizon’s board, however, is why 18 months after the announcement of the iPhone, the Verizon camp hasn’t been able to come up with any remotely credible “iPhone-killer”? They should ask their CEO what other concrete plans he might have to compete with the iPhone other than hoping that Apple’s CEO drops out of the picture due to “old age.” How does the $20.3 million-a-year CEO of a $100 billion company like Verizon display so openly its inability to compete on innovation by placing its “chances” on the demise of another CEO?

Can you imagine another CEO, even such an old adversary like Bill Gates (or even Steve Ballmer, not lacking tackiness otherwise), would ever make such an ill-wishing statement? For shame. The least Mr. Seidenberg can do is to apologize to Mr. Jobs pronto.

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.

Adobe has been known to swing to its own unique interface tune on both Mac OS and Windows. Mac users have long complained about Adobe’s considerable disregard of Mac OS native technologies, from the pointed absence of full-fledged AppleScript in Photoshop for over a decade to the absence of 64-bit version of that app on Mac OS X when it will ship for Windows likely next year.

Adobe’s UI convergence

Adobe’s goal has always been to establish its own UI as a cross-platform, third alternative to both Mac and Windows native UIs. In the process, Adobe has not been shy to invent new UI conventions that clash with native UI patterns. A case in point is the rather funky window title/menu bar design approach in the upcoming Dreamweaver, Thermo and Fireworks apps:

It can be argued that the company has been quite successful at it. By the time Creative Suite 4 ships, Adobe will have created UI patterns and a look-and-feel shared by most of its family of desktop content creation apps that work virtually identically on both platforms.

However, when it comes to stretching the boundaries of application interface nothing comes close to Flash, Adobe’s ubiquitous web media runtime. From bizarre “Skip Intros” to enigmatic UI widgets, everyone has a “Can you believe somebody actually designed that?” moment. Well aware of this, Adobe has been steadily expanding a set of (default) UI widgets and components in its Flex framework that has come to define the look and feel of many Rich Internet Applications around the web. Of course, one doesn’t have to use the default Flash/Flex UI controls as they can be varied by creating custom skins:

UI convergence on the mature desktop market may be a given for Adobe, but the next frontier is to establish Flash Lite (Flash’s mobile version) as the premier runtime and application development platform for mobile devices, now dominated by Symbian, Windows Mobile and Java.

Nokia, for one, will be rolling out Flash Lite 3.0 on its S60 series phones this year:

Why not the iPhone?

While some version of Flash Lite is available on millions of phones, it’s conspicuously absent on the iPhone.

Many reasons have been floated for why Flash isn’t a good match for the iPhone: it’s slow, it hogs CPU cycles, it drains the battery, it crashes too often, it’s not optimized for Mac OS X and so on. As obvious as these reasons may be, even if all those technical issues could be solved tomorrow, there would still remain a huge divide between Adobe and Apple on the iPhone: who controls the UI?

Adobe’s conundrum

Adobe’s interface strategy on the desktop has been to avoid using native UI controls on the deployed OS in favor of establishing and leveraging its own unique cross-platform UI paradigm that its runtime engine can deliver consistently on multiple platforms.

Unfortunately for Adobe though, Apple is in the process of establishing the first mass-market, multi-touch platform with the iPhone and has already migrated it partially to its notebooks. Clearly, Apple (which acquired FingerWorks and its patent portfolio in 2005) has greater ambitions in establishing a broader multi-touch gesture paradigm, likely to cover other devices as well:

At its introduction, what immediately distinguished the iPhone among all other mobile devices was the pervasive and consistent application of a multi-touch UI. It was as big a jump from the WIMP (”window, icon, menu, pointer”) desktop metaphor to a direct manipulation paradigm as we’ve seen in the computer and consumer electronics industries.

Not unexpectedly, every other phone manufacturer has already lined up as the next “iPhone killer” with myriad prototypes and a few shipping products. It’s easy to see in the results that it’s quite problematic to duplicate the fluidity of the iPhone’s UI without infringing Apple’s numerous patents or creating groundbreaking advances. Most pretenders aren’t up to the task: here, for example, is a Flash Lite file that “transforms” Nokia S60 phones into iPhones:

Once you get to “secondary” pages (see video), the touch paradigm gives way to the ugly WIMP interface, which has been the common theme in the vast majority of “iPhone killer” attempts. Some competitors even tried to bypass multi-touch altogether. Samsung, for example, patented a rather impractical gesture-based UI where hand/finger gestures are tracked by a phone’s camera for interaction and navigation:

Apple: Not on my device!

With the iPhone, Apple has been slowly but surely creating a third major OS platform and UI aesthetics commensurate with a multi-touch driven, small scale mobile device. This is a company so obsessed with UI and user experience that it hasn’t yet introduced something as basic as copy and paste on the iPhone 2.0 because, as is rumored, it hasn’t quite nailed a proper UI pattern.

In this highly charged and competitive marketplace to establish the next UI paradigm for mobile devices, Apple is not about to give Adobe or any other company free reins to dilute its brand proposition by introducing cross-platform, common-denominator UIs and interaction patterns to be mingled with Apple’s carefully orchestrated multi-touch approach. So what does that leave Adobe with?

Adobe’s iPhone choices

To put Flash on the iPhone Adobe may:

• strike a deal to license Apple’s entire iPhone UI controls and interaction patterns and ship them with Flash, Flex and AIR development suites as components, much like its current default set “Halo.” Apple hasn’t yet shown any inkling that it’s willing go along with this.
• decide to duplicate the iPhone UI and ignore a legal threat from seriously irked Apple IP lawyers. (For a company that once sued Macromedia for UI infringement that would be supremely ironic.)
• leave the task of creating iPhone compatible Flash components and skins to third party partners and let them deal with the legal ramifications.
• put itself in an unenviable position of having one UI paradigm for the iPhone and another for the rest of the devices it runs on, which would mean that a non-trivial application delivered for the Flash Lite runtime would end up being (at least visually) broken either on the iPhone or on other devices. After all, even the simplest of Flash UI patterns like dragging or double-clicking won’t work on the iPhone as they have entirely different consequences on this multi-touch platform.
• abandon Flash’s long standing strategy of using its own “third-platform” UI paradigm distinct from the native look and feel of the OS it’s running on by using OS-native UI controls, thereby creating a litany of OS-specific headaches for designers and developers. After all, a UI designed for the multi-touch iPhone just wouldn’t be conveniently re-morphed to run smoothly on lesser devices and vice versa.
• encourage developers to design and produce separate versions of their Flash apps for the iPhone and other platforms, but that simply defeats the whole purpose of using Flash to deliver seamlessly compliant multi-platform apps.
• develop its own non-infringing multi-touch gesture library for Flash to either compete with Apple on the iPhone, or just ignore the iPhone and try to establish an anti-iPhone multi-touch platform. (In this regard, it may approach Google to make all or parts of its technology available to Android.)

Some of these theoretical choices are of course impractical as third-party applications cannot be legally loaded on iPhones without going through “The App Store” controlled by Apple.

Apple’s Flash choices

By being so different than other platforms, Apple’s multi-touch, direct-manipulation iPhone UI clearly upsets Adobe’s strategy of a distinct, non-native UI paradigm consistent across multiple platforms and devices. With its recent purchase of chip design house PA Semi, Apple has signaled that it’s aiming to further differentiate its iPhone platform by tying native capabilities to custom-designed system-on-chips, unavailable to third parties and cloners alike. It’s not difficult to imagine that various iPhone UI capabilities will be enhanced by the power of Apple-only hardware components. So it will be increasingly difficult for Adobe or others to battle with Apple either subversively on the iPhone or competitively on other devices.

So what about Flash on the iPhone? Can the iPhone succeed without it? That’s a two-pronged challenge for Apple.

When pundits refer to the absence of “Flash” on the iPhone, they usually mean streaming Flash video, the kind that put YouTube on the map. However, that was the easier problem for Apple to (at least partially) solve. Through an agreement with Google, Apple was able to convince the biggest conduit of Flash video online to make its videos available in the widely deployed industry-standard H.264 codec, which also drives QuickTime videos. Not too long after that Adobe switched to H.264 as its primary video codec in Flash Player 9.

The other missing part of Flash is the ubiquitous .swf runtime that delivers Rich Internet Applications in the browser, and now with Adobe AIR on the desktop as well. As we have discussed previously, unlike Adobes’ Flash, Microsoft’s Silverlight and Sun’s JavaFX, Apple doesn’t have a multimedia/RIA runtime. While all three companies have publicly expressed keen interest to put their runtime engine on the iPhone, Apple has shown no interest thus far. Indeed, despite great pundit pressure, Steve Jobs went out of his way to declare Flash “too slow to be useful” on the iPhone and Flash Lite “not capable of being used with the web.”

Apple’s “RIA runtime” is turning out to be WebKit, as we detailed previously. With the upcoming MobileMe apps Apple’s arguing that an Ajax-based UI in a web browser can be as effective as a desktop app or an RIA delivered via Flash. In other words, Apple is saying: if you want to natively deliver an app for the iPhone use Cocoa Touch and if you’re reaching for cross-platform ubiquity (including on the iPhone with Safari mobile) use Ajax. Not a complicated proposition.

As for Flash, last year an Apple developer document (”Optimizing Web Applications and Content for iPhone”) listed just one item under the section “Unsupported Technologies”:

“You’ll want to avoid using Flash and Java for iPhone content. You’ll also want to avoid encouraging users to download the latest Flash on their iPhone, because neither Flash nor downloads are supported by Safari on iPhone.”

Clearly, Adobe has an uphill battle to either re-engineer the Flash runtime for the iPhone or convince Apple to specifically accommodate it by demonstrating an indisputable need for it.

Stone Doorknocker

What’s most naturally appealing about this modern work of art is that it gets the conversation going even before guests open your front door. Stainless steel envelops and plate-backs a sensuous, one-of-a-kind river rock. Sample shown is representative, although each stone will have its own unique, contemporary look. Handmade. Also makes a memorable housewarming gift for the new home or condo owner in your life.

As brilliant as it gets, for something so non-essential.

» Via Design Milk.

Do Not Enter

Somehow the two pictures on this page must be related, no?

» Via Monoscope.

Water Alphabet, 1998

I wonder if it’s pure water or mixed with an additive to make it easier to work with H2O.

Private telephone concerts

If you are a Danish music/poetry duo how do you promote your new CD, Hvem er jeg? (Who am I?)?

Bo hr Hansen & Nils Lassen offer a free and live private concert via telephone. Don’t forget to hold up the CD with your receipt, take a picture on your cellphone and send it as proof of purchase via MMS.

» Via Guerrilla Innovation.com.

With the March 6 unveiling of the SDK and associated announcements, Apple has greatly strengthened its iPhone value proposition to an extent that some have publicly called it game over in the mobile platform wars. Others, including professional Apple haters, AAPL shorters, nitpickers and link-baiters, had a field day trying to find holes in Apple’s new conquest plan.

Before calling Apple’s new position unassailable, let’s first see what the company uniquely brings to the battle field:

1. Design - Nearly half a decade after the introduction of the iPod and over a year after the iPhone unveiling, no other mobile player has caught up with Apple. With its unique position in the industry as the only truly vertically integrated company that can tightly couple its own hardware and software at the OS level, and bolstered by numerous patents, Apple’s industrial design and highly polished multi-touch interface have no peers.

2. Stores - Apple not only has the fastest growing and most profitable physical retail store chain in the U.S., it also offers apple.com, the most visited computer hardware site online; the iTunes Store, the best media download site that has sold over four billion songs; and now, what’s likely to be the best application discovery and download venue, the App Store. For developers that can see past ‘control’ issues, the promise of the iTunes Store-like App Store is genuinely outstanding.

3. Pricing - Unlike its mostly proprietary pre-Intel past, Apple can now leverage its high-volume iPod/Mac businesses to get favorable component prices and has been the industry leader in inventory and supply chain management. Backed with relentless product development, the company has mastered aggressive pricing strategies with its iPod line, offering the best price/value at every product segment. Apple will follow this proven pricing strategy with upcoming iPhone iterations.

4. Games - With a 163 ppi high-resolution 3.5″ screen, Core Animation, H.264 video, SQLite local storage, hardware accelerated OpenGL ES, 3-D OpenAL sound, accelerometer and multi-touch capabilities, the iPhone 2.0 has just become the most capable, nearly console-quality mobile game platform.

5. WebKit - Safari on the iPhone has already captured %71 of the mobile browser market in less than a year. While others like Adobe and Nokia also use the WebKit engine, nowhere does it shine brighter than on the iPhone with its multi-touch gestures and big screen. Apple is also about to let Safari run full-screen (like a native app), go native with JavaScript DOM traversal for huge speed gains and allow JavaScript to access some multi-touch gestures and other iPhone features.

6. Depth - Apple officially announced that it regards the iPod touch as the precursor of a mobile platform. Its multi-touch patent portfolio and gesture library bridges PCs (current Mac notebooks offer multi-touch trackpads) and mobile devices of various sizes/shapes, signaling product possibilities from iTablet to Minority Report-like form factors. Economies of scale, core design competencies like power management and miniaturization and cross-device integration opportunities will give Apple an incontrovertible advantage in product design in the post-PC era.

7. SDK - Cocoa Touch, the marriage of OS X and multi-touch UI, gives developers access to the hardware, multi-touch controls and events, accelerometer, view hierarchy, localization, alerts, web view, people/image picker, camera, etc., in a sophisticated IDE. The development tools in the new SDK, including an emulator and direct iPhone diagnostics, put it at the very top of the mobile development platform pyramid.

8. Enterprise - Under Steve Jobs Apple has never directly targeted the enterprise with any coherency or intent, believing that a frontal attack on Microsoft would be suicidal. The mobile space, however, has no such entrenched competitor that Apple believes it cannot effectively compete against. So, uncharacteristically, it has begun to openly court businesses large and small and, to the extent that it can maintain its momentum and focus, the enterprise world is a new and significant market for the company.

9. Ecosystem - From automobiles to leather cases, Apple has already created the biggest-ever ecosystem around a consumer electronics product line with the iPod. No other player in the mobile space has comparable experience in growing a billion dollar plus ecosystem, which should come in handy with a growing iPhone franchise.

10. Curatorship - Some pundits and developers see Apple-imposed restrictions in the SDK or the App Store as impediments to wider adoption of the iPhone. However, Apple has proven with Mac OS X and the iPod that it can anticipate user needs, trade featuritis for enhanced user experience and carefully distill choices to create coherent and desirable products. User satisfaction surveys consistently prove actual users love their iPhones at rates far above rival devices.

Are there any chinks in Apple’s armor? Certainly. There are real and perceived ’shortcomings’ that likely won’t change soon: dedicated enterprise sales network, physical keyboard, removable battery, etc. Others may change soon with the iPhone 2.0: video, GPS, Bluetooth A2DP, cut and paste, global search, exposed file system and so on. Some new capabilities like 3G will surely come in a few months.

What was displayed by Apple at the March 6 SDK event and the uniquely competitive factors listed above, however, should overwhelm most if not all its competitors, to echo General Colin Powell’s famous doctrine of attacking adversaries with overwhelming force to ensure victory. Apple’s arsenal is now the widest and deepest in the industry.

Who then can challenge Apple? Not Palm or Motorola (extremely weak and rudderless leadership); not RIM (no OS level hw/sw integration, little UI and very limited consumer market expertise); not Sony, Samsung or LG (no OS level hw/sw integration and limited UI expertise); not Adobe or Google (not much hardware experience). Nokia and Microsoft appear to have had the longest experience, but neither has anything like the ten factors cited above that make Apple such a well rounded competitor in this field.

As the PlaysForSure and Zune debacles have amply demonstrated Microsoft is forever saddled with the inability to choose between the OEM/partnership approach that worked on the desktop and going it alone which hasn’t in the mobile space. No doubt Microsoft will come up with its own mobile/phone hardware device and then try to balance that with its Windows Mobile licensees’ interests. The $44.6 billion question for Microsoft is, can it juggle all this with its impending Yahoo entanglement over the next three years?

Finally, how good a competitor will Nokia be? To its credit the company quickly recognized its weak points in interface development (bought Trolltech), music downloads (opened a UK-based store but it’s IE/Windows only) and online presence (recently started Ovi). Nokia is the volume leader in the mobile industry, but hasn’t really exploited that advantage, as we previously covered. It has to walk a very tight rope in order not to upset its carrier partners.

We thus see no other player that can bring as much to the table as Apple. Clearly, this is Apple’s war to lose.

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.

My quest for extraordinary and ephemeral typefaces continue:

Limbtype

Be sure to look at the other “characters” in Flickr.

Ice cream lettering

That’s the first frame of a short video (scroll to the bottom at the site) that reveals what happens to meltable typefaces.

» Via Quipsologies.