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Thursday, July 15, 2004

Now IBM buys Alphablox

Alphablox is the BI vendor that bought, whose developers went on to found Oddpost, as I mentioned last week. So did IBM buy Alphablox for the same reason that Yahoo! bought Oddpost? Or is it just coincidence that both acquisitions have happened at the same time?

The common theme here is the increasing value of browser-based distributed functionality. So in that sense, yes, both acquisitions happened for the same reason. Having halfbrain's technology built into Alphablox increased the value of the company for IBM. But it was just one factor: other elements of the Alphablox technology — in particular its componentized, highly configurable, network-friendly nature — made it even more appealing to IBM.

Nevertheless, the acquisition supports the case I was making on Monday, that networked functionality is what counts today, much more than localized capabilities. There have been quite a few comments on that posting, so let me summarize and respond to some of the points people have been raising:

  • Microsoft already make a web version of Outlook. I think very few people really appreciate that there's a huge difference between web-based and net-native. Putting a web-based interface in front of a product that's architected to run on a specific client desktop isn't going to deliver the kind of capabilities a true net-native client can offer. I would love to see Microsoft put its development focus into making its web-based Outlook client a really powerful net-native piece of software, but there's no evidence of it happening yet.
  • Outlook is safe because it delivers enterprise-class features. A well-argued comment from Olivier Travers makes this case at some length: "... Where is enterprise directory support in Yahoo Mail and how do you synchronize sign-on with other applications and resources? You mean I have to create my user accounts manually, one by one? How do you support offline users? How do you archive emails to guarantee legal compliance? Where's calendar integration (with a calendar that actually supports teamwork)? I could go on and on ..." A perfect counterpoint to this argument comes from Zane Thomas, drawing on Clayton Christensen's writings: "By my reading of The Innovator's Solution, Microsoft will almost certainly give that ground to Yahoo and will continue to try to move up-range into more expensive and complex products for large customers, ie. corporate america ..." As a great fan of Christensen, I've already written along these lines on several previous occasions.
  • You can do so much more on a desktop. "I rather suspect that if anything we can expect richer desktop apps which pull together email, web pages, address book and, especially RSS news feeds," writes Andrew Duncan. "Other kinds of web services will also play into the 'desktop' hub." This is exactly what Microsoft is counting on. Rather than migrating applications to the browser, its strategy is to migrate browsing to Office. If all the network resources I need are available to me within the familiar, rich environment of the Office applications suite, then why would I ever want to leave it? This strategy might just work, even though Microsoft is having to make Office itself more open, moving to an XML-based file format for example. As long as Microsoft continues to write software that people perceive as being great, it should hold on to its virtual monopoly hold on the office suite market, but it will have to stay on its toes.
  • Oddpost only runs on IE/Windows anyway, so Microsoft still wins. I'm glad somebody mentioned that, because it brings me back to my original point: Avalon: Microsoft's microchannel. The whole world runs on Win98/IE5.5 and above, and they're perfectly happy there. Microsoft aims to move them all to its next release of Windows, incorporating the new all-singing all-dancing Avalon graphics engine. But what if no one wants to go there? What if PC manufacturers prefer to keep bundling the old Windows with their new PCs? Or what if, as in China, they prefer to bundle Linux instead? Microsoft can't force them to move up to its new operating system — governments will gladly step in and slap on fines if it so much as tries. And if Microsoft declares it will only sell the new version of Windows, then either government action or market pressure will force it to open-source the old Win98/IE5.5 platform.

And to those who say, it couldn't possibly happen, I say: watch this space.

posted by Phil Wainewright 9:34 AM (GMT) | comments | link

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