<![CDATA[Gawker: valleywag, ibm]]> http://tags.gawker.com/assets/base/img/thumbs140x140/gawker.com.png <![CDATA[Gawker: valleywag, ibm]]> http://gawker.com/tag/valleywag/ibm http://gawker.com/tag/valleywag/ibm <![CDATA[Larry Ellison Can't Be Bothered With the Facts]]> Here's how Oracle hypes its business software: Write an ad claiming it's exponentially better than the competition. Then, mold the facts to fit the hype. CEO Larry Ellison's done this for decades; today he got caught. Click through for evidence.

Attached is the ad Oracle ran in the lower right corner of today's Wall Street Journal. An early edition posted to the newspaper's website illustrates how Ellison likes to operate. Check out the highlighted bit — Oracle never bothered to fill in the data to support its certain conclusion. The attitude: "Definitely say we're way 'faster' on hardware from Sun, which we now own, than on IBM, which makes a competing database; we'll find some numbers later to prove it."

All tech moguls, to some extent, play this marketing game, but Ellison has historically been an especially egregious example; his brazenness, in fact, helps explain why Oracle, through a series of mergers, has come to utterly dominate the market for the most complex types of large corporate software.

An example: Ellison in the late 1980s commissioned an ad to tout a hugely complex clustering feature for Oracle database software — and did so before one line of code had been written to support that feature. This according to Mike Wilson's biography of Ellison:

About 1987 word got out that the Ingres database would soon have a sexy new function: It would be able to do distributed queries... Ellison told [Oracle ad man Rick] Bennett to prepare an advertisement announcing Oracle's distributed capability. Then he assigned an engineer to whip up a distribtued feature so the company would actually have something to sell when the ad appeared. Ten days later Bennett's advertisement hit the trade press: "Oracle Announced SQL*Star," it said. "The First Distribtued Relational DBMS..."

"The fact of the matter was Oracle didn't have anything," said George Schussel, the trade show promoter who had followed Oracle from the beginning. "But that was the way they worked. Everything was marketing, everything was image. You simply announced the product and then figured out later how to deal with it from a technological point of view."

Another time, Wilson writes, Oracle took out an ad implying, outlandishly, it had ported a competing database to the PC from mainframes — "IBM SQL/DS AND DB2 DBMS NOW ON PC," read the ad headline. Ellison "exploded" when an engineer challenged the ad, Oracle vet Kirk Bradley told Wilson:

"He said, 'All companies do this. It's standard stuff. You don't know anything about business.'"

It's somehow comforting to know that, while hot companies like Twitter, Google and Netscape may come and go, some longtime CEOs basically haven't changed for decades. Larry Ellison will always be a shameless truth-bender. Just like some of his closest friends.

UPDATE: One commenter supposes, quite plausibly, "They're going to announce the results at OpenWorld on Oct 14 and we're all supposed to tune in then to find out what XX equals." So maybe Oracle is doing the same fill-in-the-blanks thing it's always done, just in a very open and shameless way. Transparency. People do change!

UPDATE 2: Oracle has been fined over this ad, since Oracle did not possess any TPC benchmarks to back up the ads claim. Oracle was, again, hoping the facts would fit the claim, when said facts came into existence, which at the time of this ad they had not.

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<![CDATA[A Computer That Answers Questions! What Will They Think of Next?]]> Jeopardy champ Ken Jennings is challenging IBM's Watson supercomputer. It's a replay of Big Blue's chess contest against grand master Garry Kasparov, but on an Alex Trebek-run battlefield.

Unlike the complex game of chess, mastering Jeopardy with a computer would seem to be a simple matter of automating Wikipedia searches. But there's more to it than that:

One of the toughest challenges for Watson's programmers is predicting confidence in answers-in other words, programming the computer to know when to buzz. Jennings, during his record-breaking Jeopardy! run, would sometimes buzz early, then seem to think for a few seconds before answering.

"I can't validate one way or another exactly what Ken Jennnigs was doing, but I can say the behavior you described is one that suggests that I'm extremely confident that I know all the answers," Ferucci said.

Okay then, but if IBM was searching for an even more impressive feat, how about programming its computer to host Jeopardy rather than play it? Trebek's robotic delivery makes him easily replaced by a speech synthesizer. Heck, we bet Watson's blinking lights would be more watchable.

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<![CDATA[IBM running out of ideas]]> The company whose "Think" slogan became a generational buzzword isn't doing so well with the brand identity campaigns lately. A tipster points out that IBM's latest mouthful of a proverb, "A mandate for change is a mandate for smart," comes illustrated with what looks exactly like a 1981 Keith Haring drawing rinsed of its pizazz. The accompanying essay reads like Kevin Kelly in Wired circa 1993. I stopped reading when I got to the claim, "Smart healthcare systems can lower the cost of therapy by as much as 90%." Call me when that's ready.

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<![CDATA[Apple's CEO-in-waiting]]> Some days it seems like Steve Jobs will be CEO of Apple until he dies. But after a bout with pancreatic cancer and a health scare earlier this year, peope are starting the grieving process earlier. Part of that involves playing a guessing game about who will take his place. Fortune convincingly argues that Apple COO Tim Cook is the only real candidate.

Cook is paid more than anyone else at Apple, and he's the only executive allowed an outside board seat (Cook is a director at Nike). More importantly, he's humble enough not to push for a CEO job that can never be his as long as Jobs is in the saddle.

True, Cook is an operations expert, not a product genius like Jobs, but he could surround himself with Apple executives like Scott Forstall and Jonathan Ive to make up for that lack. Only one wild card: Mark Papermaster, the IBM chip executive whose recruitment by Apple has embroiled the companies in a lawsuit. if the hire goes through, Papermaster will report to Jobs, not Cook.

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<![CDATA[IBM CEO begs Obama for bailout]]> The world's biggest IT services firm fed the New York Times a copy of a speech CEO Sam Palmisano was scheduled to make today in front of the Council of Foreign Relations in New York City. Sam's proposal is blatant: "A technology-fueled economic recovery plan that calls for public and private investment in more efficient systems for utility grids, traffic management, food distribution, water conservation and health care." Also, free Zipcars for gossip bloggers.

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<![CDATA[iPod's father leaves Apple]]> Tony Fadell, the head of Apple's iPod division, is exiting Steve Jobs's reality distortion field. While Fake Steve Jobs likes to take credit for inventing the frigging iPod, its real mastermind is Tony Fadell, who took his plans for an MP3 player to Apple in 2001 as a consultant. His replacement: Former IBM chip expert Mark Papermaster, whose erstwhile employer is suing Apple to prevent him from taking a job there. That Papermaster is replacing Fadell makes its lawsuit even stranger; it is seeking to enforce a noncompete clause in his contract, but a job overseeing MP3 players and cell phones hardly seems a competitive threat to IBM. Fadell is planning to take some time off Pity. Since he joined Apple, Fadell's homepage has turned into a placeholder. We were looking forward to the return of the "jazzy, shameless self-promotion" it once offered.

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<![CDATA[Apple poaches IBM chip guy Mark Papermaster]]> Who's Mark Papermaster, the chip guru Apple and IBM are scrapping over? Here's one clue: He's the kind of guy who has no photos online. There used to be a "Mark Papermaster" profile on Facebook, but it's gone. No wonder he wants to disappear: Apple hired Papermaster, formerly a VP at IBM, possibly to run its PA Semi chip-design subsidiary. Apple switched to Intel chips for its Macs years ago, but after it bought PA Semi, speculation grew that it might use some variation on IBM's Power chips for the iPhone and iPod. Papermaster could help with that.

IBM is suing Papermaster and Apple over the terms of his noncompete agreement. Apple and IBM hardly compete, which makes IBM's lawsuit a bit puzzling. California law is unfriendly, in general, to noncompete agreements; if anything comes of the lawsuit, it will likely be some kind of settlement. Here's why I think IBM is suing Apple and Papermaster: It just wants to get some idea of what Apple's up to.

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<![CDATA[Are tech companies turning into banks?]]> When Wall Street fails, Silicon Valley must step up. So goes the hubristic thinking here. Debt greases the wheels of commerce, and the sale of servers and software is no exception. And that part of the credit industry has hit a rough patch, too, with defaults on equipment loans nearly doubling in the past year. As with other credit markets, this had made traditional lenders nervous. So cash-rich tech companies are venturing into lending themselves. IBM has long had an in-house lending arm, with $24.5 billion in loans outstanding. Cisco lent $4 billion to customers last year. Even eBay is getting into the game through Bill Me Later; it acquired $550 million in consumer loans in conjunction with the purchase of the payments startup.

We know how this ends — with tech-company shareholders footing the bill. Cisco wrote off $900 million in bad debt in 2001. It will surely claim to have learned its lessons since then. But as others rush in to help customers acquire their wares, some will surely get burnt. As will investors, who may think they're buying shares in a tech company, only to discover they've put money into a bank.

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<![CDATA[IBM didn't get the memo, thank God]]> The world's largest computer services company pre-announced Q3 earnings with profits beyond analysts' forecasts. Even the Nasdaq is up on the news. Quick, ask your parents for that iPhone now.

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<![CDATA[IBM makes environment easy to bookmark and forget]]> "Energy-efficient computers powered by sunshine. This will be an instant hit," grouses chief bitterness officer Ted Dziuba in his latest opinion column for The Register. "There will be greenhouse gas output dashboards with neat little Ajax widgets." Mystery contributor theodp points out that IBM already sells it.

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<![CDATA[mrfomoco]]> In a post showing slides from IBM's 1975 presentation, commenter mrfomoco deftly explains the genius behind Big Blue's marketing, complete with visual aides:

This is IBM's stock-in-trade, right out of Sales 101a: Pretend to know something the buyer doesn't. You use the customer's own fears against them, to overcome rational objections.

So, they drag the same old scare tactics — Sweet Jesus, they're gaining on you! Don't just stand there, do something! — out of the marketing closet, every few years. Here, it's a roomful of affirmative graffiti ('THINK' being notably absent), plus a charmingly recursive slogan, 'The decision to decide' ([www.squareamerica.com]). More recently, silly execs building 'Innovation Rooms' were chastised with, 'Stop Talking. Start Doing'.

It's the kind of insight you'd expect to hear from luminaries like Yoda or Pat Morita, so I'm guessing it works like those cheap Jedi mind-tricks. Unless you're a Toydarian, of course.

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<![CDATA[IBM preso from 1975 proves they had better fonts then]]> One foot in the future, one planted squarely in the '70s. These slides from an IBM presentation — 17 years before anyone bothered to plug the projector into a laptop — prove how little has changed. Except now the office workers behind the narrator have YouTube to watch whenever he turns his back.

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<![CDATA[IBM's new antitrust muddle]]> European regulators are looking into whether IBM is unfairly dominating the mainframe market. What, is this 1968? IBM's purchase of Platform Solutions, a 36-person rival which made cheaper versions of IBM's mainframes, would normally be too small to rouse antitrust inquiries. But, amid accusations that IBM bought the firm to quash a rival, regulators are looking into it nonetheless. I'm actually disinclined to believe the conspiracy theories. IBM, under official antitrust oversight for decades, surely doesn't want to invite government officials back in.

More likely: IBM was the only likely buyer for Platform Solutions, which may have been running into financial trouble. One former contractor for the startup tells Valleywag that his work for Platform Solutions went unpaid for months before his contact there dropped out of sight altogether in January.

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<![CDATA[IBM employee directory mocks your company's lameness]]> Tech companies like to babble about openness and transparency. But try finding an engineer's phone number. Standard procedure is to hide company telephone and email directories from external eyeballs, lest a recruiter — or, more annoyingly, a reporter — use the phone list to cold-call staffers. One shining exception: IBM, the world's largest IT employer, with nearly 400,000 people on board in at least 90 countries. Why would the company publish its entire directory and risk attack from headhunters and snoops? Because in 2008 IBM doesn't sell servers, it leases brains. Customers don't want to submit a request to a faceless feedback form and hope the right person at the world's biggest, sprawlingest tech company sees it. I'm sure there was a fight over the decision. But they finally faced the truth: We already hunt their employees down on Blogger and LinkedIn.

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<![CDATA[Bill Gates's relevance — and irrelevance]]>

The Economist tidily sums up billg's career this week, now that Microsoft's Rain Man (see video) has walked away from the company after 33 years. I've whittled the piece down to its talking points.

When Bill Gates helped to found Microsoft there was a company rule that no employees should work for a boss who wrote worse computer code than they did. Just five years later, Mr Gates hired a business manager, Steve Ballmer, who had cut his teeth at Procter & Gamble, which sells soap.

In becoming the world’s richest man, Mr Gates’s unswerving self-belief has repeatedly been punctuated by that sort of pragmatism. To let it all go is to acknowledge that his best work at Microsoft is behind him. It is to accept that the innovator’s curse is to be transitory.

Mr Gates’s vision has come to seem so obvious that it is hard to imagine the world any other way. Yet, early on, he grasped two things that were far from obvious at the time:

  • Computing could be a high-volume, low-margin business. Until Microsoft came along, the big money was in maintaining a select family of very grand mainframes. Profit would come from selling a lot of them cheaply, not servicing a few at a great price.
  • Making hardware and writing software could be stronger as separate businesses. When mighty IBM unwittingly granted Microsoft the right to sell its PC operating system to other hardware firms, it did not see that it was creating legions of rivals for itself. Gates did.

Mr Gates’s invention was as a businessman. His genius was to understand what he needed and work out how to obtain it, however long it took. In an industry in which visionaries are often sniffy about anyone else’s ideas, the readiness to go elsewhere proved a devastating advantage.

Gates had the good fortune to be perfectly suited for his time—but he is less well-equipped for the collaborative and fragmented era of Internet computing. Some great industrialists, like Henry Ford, stick around even as the world moves on and their powers fail. Mr Gates, pragmatic to the end, is leaving at the top.

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<![CDATA[Google, HP and others form League of Extraordinary Patent Holders]]> Tired of fielding lawsuits from patent trolls and scared of court injunctions like that faced by RIM which nearly shut down the company's BlackBerry service, Google, Hewlett-Packard, Cisco, Verizon and Ericsson are among the companies rumored to be behind the formation of the Allied Security Trust. Ponying up $250,000 down payments and $5 million in escrow to make purchases, the trust seeks to buy patents before they fall into the hands of patent trolls. (That's the polite name the group's founders use for companies which seek to make money litigating infringers rather than by create products.) But the real bogeyman here is the rise of a possible patent troll to rule all patent trolls, Intellectual Ventures, which has close ties to Microsoft.

The plan is for companies that buy into Allied Security to buy up unused patents, issue themselves nonexclusive licenses for a song and then sell the patents. While it's not clear if Allied Security is a nonprofit, former IBM veep Brian Hinman who heads up the organization asserts it's not a profit-making venture. IBM, of course, has done much to refashion itself as a promoter and producer of open-source software — something anathema to Microsoft's culture.

The same can't be said of Intellectual Ventures, which was founded by former Microsofties Nathan Myhrvold and Edward Jung, Intel's Peter Detkin, and Gregory Gorder of Seattle law firm Perkins Coie, which counts Microsoft as a top client. Myhrvold has been buying up patents left and right, and while his company has yet to sue anyone, he hasn't ruled it out. Microsoft executives have traditionally aped Bill Gates hard-line rhetoric when it comes to intellectual property, and there's little reason to believe Myhrvold and company are any different. While Google is also an investor in the fund (along with Apple and eBay), the Mountain View company must be worried enough about the fund's plans and ties to have helped create a potential competitor.

In other words, if Intellectual Ventures continued to aggregate patents in a competitive vacuum, it could become just as if not more dangerous a monopoly than Microsoft in the company's heyday by commanding premium royalties or denying access to patents entirely in order to hobble products and competitors. It's yet to be seen if Intellectual Ventures will carry water for the Redmond software giant in court, and for now, Allied Security is collection of legal documents and yet an actual owner of patents, but this could shape up to be one of the most boringly important battles in the coming years.

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<![CDATA[Bill Gates looks back at the competition Microsoft annihilated]]> Putting media naysayers in their place, Microsoft co-founder Bill Gates continued his farewell tour by pointing to old press accounts of companies like Ashton Tate and Lotus as worthy competitors into the perspective only the ultimate winner can enjoy. When asked by CNET's Ina Fried about the early presumptions that IBM would eat Microsoft's lunch and how that turned out, Gates used the opportunity to challenge those who would similarly presume that Google will eventually destroy Team Redmond.

Google is a very strong competitor, and so people will enjoy watching whether they can be challenged. The world will be better off if they are challenged effectively, and I think there's only one company left in terms of the depth and breadth and staying power that you need (to) really give them a big challenge.

Google-baiting aside, did Gates bringing up WordPerfect make anyone else feel really, really old?(Photo by AP/Stephen Brashear)

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<![CDATA[Interview with Konrad Zuse, inventor of first functional computer]]> In the 1930s, Konrad Zuse, a German scientist, invented the first functional computing device, an electromechanical beast that used relays as logic gates. In this interview from The Machine That Changed the World, a 1992 documentary digitized and posted by Upcoming founder Andy Baio at Waxy.org, Zuse spoke about his role in history.

"You could say I was too lazy to calculate, so I invented the computer." The whole documentary is a lot of fun to watch — famed British thespian David Jacobi even makes an appearance in a dramatization as the legendary Alan Turing. Zuse and Turing were on opposite sides of World War II, with Zuse's machine mostly used to crunch numbers for the Nazis' rocket projects. Helping to keep track of the undesirables intended for slaughter in the concentration camps? That was IBM's job.

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<![CDATA[HP moving to acquire EDS in $12 billion-plus deal]]> HPThe Wall Street Journal is reporting that Hewlett-Packard is nearing a deal to buy EDS for $12 billion to $13 billion. Having set Dell back on its heels in PC sales, HP is now moving to challenge IBM. As computers become commodities, the money is in installing and maintaining them, not marking up Intel's microprocessors and Microsoft's operating system for a thin margin. One wonders if Michael Dell is gutsy enough to launch a rival bid — or, with HP now worth three times as much as Dell, if he can really afford to.

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<![CDATA[White House used Microsoft software to flout email-archiving law]]> At last, an explanation of the Bush Administration's misbehavior that will resonate in Silicon Valley: It's all Microsoft's fault. Ars Technica details how switching from an IBM Lotus email system installed under Clinton to a Microsoft Exchange server made it impossible to store White House emails systematically. The archiving system was operated manually, and Bush appointees nixed efforts to upgrade it. CIO Theresa Payton says that the White House is now working on a new system, but knowing the ways of both Washington and enterprise software, what are the chances it will be done before we have a new president?

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