In the mid-to-late 1980s colleagues and friends were surprised when I transitioned from working as an on camera investigative TV reporter to cover the then-fledgling high technology industry for specialized trade magazines.
After all they reasoned, how could I be content covering semiconductors, memory boards, server hardware, software and computer networks after working as a mainstream journalist covering stories such as lurid political and law enforcement corruption scandals ; drug trafficking; prostitution; dumping tainted substances on unsuspecting third world nations and cover-ups by big business when their planes, trains and automobiles malfunctioned? How could I trade in “murder and mayhem” for the staid, sterile world of high technology?
They needn’t have worried.
Admittedly, mastering the technology was a challenge. For the first few weeks every time I did story on PALs and had to spell out the acronym I wrote “Police Athletic League” instead of Programmable Array Logic. And then there was my first work-related trip to Las Vegas to cover the mammoth spectacle that was Comdex circa 1988. In the dark ages before wireless, laptops and decent broadband, it was nearly impossible to file stories from your hotel room because the trunk lines were overwhelmed. A colleague and I were forced to trek down to a bank of pay phones to transmit our news articles at 2:30 a.m. and were mistaken for hookers. The pay was arguably better than a journalist’s salary but we passed. Incidents like this made me feel close to my cops and crimes, murder and mayhem investigative TV roots.
I felt at home covering technology right away. Within a month, I was chronicling tales of high tech companies sending their top executives off to rehab for drug and alcohol addiction; there was a rash of top executives leaving established powerhouses like and taking top engineers and sales executives with them, which in turn precipitated a slew of theft of trade secrets and patent infringement lawsuits. Things really got interesting when Robert Morris, Jr. launched his now infamous Internet Worm; there were myriad other tales of sex scandals, involving corporate executives, board of director fights and coups, price fixing, hostile takeovers, corporate espionage and fiscal chicanery that entailed everything from embezzlement and theft to cooking the books .
Reality TV and the tabloids have nothing on high technology industry hijinks.
Fast forward to what’s making headlines during these “Dog Days” of summer 2010. The ancient Greeks and Romans believed that the dog days of summer (named after the constellation Sirius or Dog Star) lasted from late July to early September and hot weather foreshadowed evil doings. John Brady’s “Clavis Calendarium of 1813 describes it as “an evil time when the seas boiled, wine turned sour, dogs grew mad, and all creatures became languid, causing to man burning fevers, hysterics, and phrensies.” The recent spate of high tech headlines seems to bear that out. Here’s a sampling:
• The Hewlett-Packard board of directors abruptly fired CEO Mark Hurd, after allegations of sexual harassment surfaced.
• Oracle CEO Larry Ellison publicly blasted the HP board for firing Mark Hurd.
• Oracle sued Google for alleged patent and copyright infringement involving the use of Java intellectual property in Google’s mobile Android operating system.
• Google StreetView maps prompts privacy lawsuits and raids in several countries including South Korea
• Google releases version 6 of its Chrome web browser and vows to issue a stable new release every six weeks.
The headlines provide an accurate assessment of both the current state and the direction of the high tech industry. Four words say it all: sex, money, power and posturing. Let’s examine some of the stories in more detail.
The HP board of directors’ decision to fire CEO Mark Hurd after five years of stewardship remains cloaked in mystery. Hurd may or may not have been guilty of fudging expense reports and engaging in conduct not up to HP’s standards with Jodie Fisher, a contract HP “adviser” and sometime actress. In addition to being an adviser, Fisher also received $5,000 to attend HP events acting as a “meet and greet” hostess. Fisher, who retained the services of celebrity lawyer Gloria Allred, may or may not have been a victim of harassment. We don’t know for sure because all of the principals in this tableau are mum. Rumors are rife that the “real reason” the HP’s board may have shown Hurd the door is because: 1) he may have been more involved than was previously thought in the 2006 HP board of directors “pretexting” scandal. At that time, HP board members illegally spied on other board members to learn the source of news leaks and 2) Hurd was exceedingly unpopular with rank and file HP employees.
By all monetary measures, Hurd’s five year stint at HP was a resounding success. And for that, Hurd will walk away with a $40 to $50 million severance package. No one knows how much Fisher received, because Hurd and Fisher settled whatever transpired between them, privately. But it must be a pretty good sum, because Fisher issued a very upbeat and conciliatory statement saying she did not intend for Hurd to lose his job and wishes Hurd, his family and HP all the best. Thankfully, I read this on an empty stomach!
What’s wrong with this picture? Plenty.
The real victims here are HP’s rank and file employees, the American worker and sexual harassment victims – both men and women – who lack the clout to hire a Gloria Allred to rattle her saber for another 15 minutes of fame and a quick, inglorious settlement.
The average Joe and Jane worker have seen their ranks decimated with each new acquisition and round of layoffs. HP currently ranks number 9 on Fortune 500 list. In the past several years it has acquired Compaq, EDS, 3Com and Palm. Those mergers and acquisitions helped HP become the first high tech company to have annual revenues that exceed the $100 billion threshold. HP is also first in another category – albeit an unwelcome one: despite its stellar financial performance, over the last decade HP has cut more jobs (most of them here in the U.S.) than any other high tech firm. The head count stands at approximately 85,000.
So Mark Hurd gets $40 to $50 million and tens of thousands of HP’s American employees get shown the door.
Then there’s Ms. Fisher. I know nothing about the woman. One must presume if Hurd was willing to settle with her that her claim had some merit. However, as soon as I heard she was represented by Allred, I cringed. Allred has turned into a modern day Carrie Nation for the tabloid TV generation. In an age of instant and continual information via the Tabloids and the Web, publicity is the chief currency – the more salacious and lurid, the bigger the settlement. I phoned Allred’s office to inquire how many pro bono and non-celebrity sexual harassment cases she handles. I haven’t heard back yet and I’m not too hopeful.
The Equal Employment Opportunity Commission (EEOC) received 12,696 complaints of sexual harassment in the workplace – 16% of them by men. The EEOC says it recovered $51.5 million in monetary benefits for those nearly 13,000 workers. That’s probably just about what Mark Hurd, Jodie Fisher and Gloria Allred pocketed among the three of them. Nice work if you can get it.
That brings me to another prominent headline of the past couple of weeks: Oracle chief Larry Ellison, in an interview with the New York Times blasted the HP board for firing his longtime friend Mark Hurd. Ellison’s comments have all the credence of a professional athlete convicted of using steroids writing an editorial extolling the virtues of doping. Oracle, which completed its acquisition of Sun Microsystems earlier this year, is gearing up to axe up to one-third to one-half of Sun’s workforce of over 25,000. No one is sure exactly how many Oracle employees will be pink slipped but estimates range from 5,000 to as high as 10,000. Oracle disclosed in a recent government finding that it will take write off $825,000 in restructuring charges.
The question is will Larry Ellison make room for Mark Hurd at Oracle? He might. Hurd has a proven record of cutting costs, cutting people and thus delivering value to shareholders.
The real measure of a company’s success should not be measured by how many jobs it cuts by how many jobs it creates for the American worker.
Oracle also made headlines and flexed its muscles last week with the announcement that it is suing Internet search engine giant Google for allegedly infringing on the Java patents Oracle now owns as part of the Sun acquisition, that are used in Google’s mobile Android operating system. This is all about Oracle making a preemptive strike to try and contain Google in what’s shaping up to be a battle of high tech titans. Google’s Android OS runs on many of the major mobile phone platforms including Motorola and HTC Corp. The implications are enormous. Don’t expect this one will ever get to court. Neither firm wants to spend millions or expend precious corporate resources in a protracted legal battle, which would be detrimental to both sides. Expect them to settle. But we can also expect the acrimony between these two rivals to rise commensurately along with the stakes in the mobile market.
Google meanwhile engaged in some posturing of its own. The company released beta version 6 of its Google Chrome web browser. Google also says it will issue a stable new release of the browser every six weeks. This move is clearly designed as a challenge to Microsoft Internet Explorer, Mozilla Firefox and Apple Safari. While I applaud Google’s initiative and desire to retain its competitive edge, releasing a new version of its browser every six weeks is overkill. No matter how fast Google or any vendor makes its browser, the actual speeds are still determined by the user’s broadband. And frankly, the constant application upgrades to everyday packages like Adobe, WordPress and the various browsers are a nuisance. One can barely log on to an application without being hounded to upgrade to the latest version. It’s a major nuisance.
But these days, companies feel compelled to make an announcement just to keep their names in the headlines at all costs. There’s never a dull moment in the high tech industry, especially during the dog days of summer. I can’t wait to see what fall brings. If you have any ideas, Email me at: ldidio@itic-corp.com.

Since January, the high technology industry has witnessed a dizzying spate of dueling, vendor product announcements.
So what else is new? It’s standard operating procedure for vendors to regularly issue hyperbolic proclamations about their latest/greatest offering, even (or especially) when the announcements are as devoid of content as cotton candy is of nutritional value. Maybe it’s just an outgrowth of the digital information age. We live and breathe instant information that circumnavigates the globe faster than you can say Magellan; the copy monster must be fed constantly. Or maybe it’s the protracted economic downturn which is making vendors hungrier than ever for consumer and corporate dollars.
Whatever the reason, there’s no doubt that high technology vendors – led by Google and Apple – are engaged in a near constant game of one-upmanship.
Apple indirectly started this trend in early January, when word began leaking out that Apple would finally announce the long-rumored iPad tablet in late January. The race was on among other tablet vendors to announce their products at the Consumer Electronics Show (CES) in Las Vegas in mid-January to beat Apple to the punch. A half-dozen vendors including, ASUSTeK Computer (ASUS), Dell, Hewlett-Packard, Lenovo, Taiwanese manufacturer Micro Star International (MSI) and Toshiba all raced to showcase their forthcoming wares in advance of Apple. It made good marketing sense: all of these vendors knew that once Apple released the iPad, that their chances of getting PR would be sorely diminished.
I have no problem with smaller vendors or even large vendors like Dell and HP, who rightfully reckon that they have to make their announcements in advance of a powerhouse like Apple to ensure that their products don’t get overlooked.
Apple vs. Google Battle of the Mobile Web Titans
But when the current industry giants and media darlings like Apple and Google start slugging it out online, in print and at various conferences, it’s overwhelming.
Apple and Google are just the latest in a long line of high technology rivalries. In the 1970s it was IBM vs. HP; in the 1980s, the rise of networking created several notable rivalries: IBM vs. Digital Equipment Corp. (DEC); IBM vs. Microsoft; Oracle vs. IBM; Novell vs. 3Com; Novell vs. Microsoft; Cabletron vs. Synoptics and Cisco vs. all the internetworking vendors. By the 1990s it was Microsoft vs. Netscape and Microsoft vs. pretty much everyone else.
The Apple vs. Google rivalry differs from earlier technology contests in that the relationship between the two firms began as a friendly one and to date, there has been no malice. Until August, 2009 Google CEO Eric Schmidt was on Apple’s board of directors. And while the competition between these two industry giants is noticeably devoid of the rancor that characterized past high tech rivalries, it’s safe to say that the two are respectfully wary of each other. Apple and Google are both determined not to let the other one get the upper hand, something they fear will happen if there is even the slightest pause in the endless stream of headlines.
Google and Apple started out in different markets – Google in the online search engine and advertising arena and Apple as a manufacturer of consumer hardware devices and software applications. Their respective successes – Apple’s with its Mac hardware and Google’s with its search engine of the same name have led them to this point: a head to head rivalry in the battle for supremacy of the mobile Web arena.
On paper, they appear to be two equally matched gladiators. Both companies have huge amounts of cash. Apple has $23 billion in the bank and now boasts the highest valuation of any high technology company, with a current market cap of $236.3 billion, surpassing Microsoft for the top spot. Google has $26.5 billion in cash and a valuation of $158.6 billion. Both firms have two of the strongest management and engineering teams in Silicon Valley. Apple has the iconic Steve Jobs who since his return has re-vitalized the company. Google is helmed by co-founders and creative geniuses Larry Page and Sergey Brin and since 2006 and Eric Schmidt, the CEO who knows how to build computers and make the trains run on time.
Fueling this rivalry is Apple’s and Google’s stake in mobile devices and operating systems. In Apple’s case this means the wildly successful iPhone, iPod Touch and most recently the iPad and the Mac Mini. Google’s lineup consists of its Chrome OS and Android OS which will power tablet devices like Dell’s newly announced Streak, Lenovo’s forthcoming U1 hybrid tablet/notebook due out later this year. The rivalry between the two is quite literally getting down to the chip level. Intel, which has for so long been identified with Microsoft’Windows-based PC platform is now expanding its support for Android – a move company executives have described as its “port of choice” gambit. Apple is no slouch in this area, either: its Macs – from the Mac Minis’ to the MacBook Pros, ship with Intel inside. Last week Nvidia CEO Jen-Hsun Huang weighed in on the Apple/Google rivalry on Google’s side, predicting that the tablet designs will converge around Google’s operating system.
But a stroll through any airport, mall, consumer home or office would give a person cause to dispute Huang’s claim: iPads and iPhones are everywhere. Apple recently announced that it has sold over two million iPads since the device first shipped in April. During a business trip from Boston to New Orleans last week I found that Apple iPads were as much in evidence as hot dogs at a ballpark.
Ironically, Microsoft, a longer term traditional rival of both Apple and Google is not mentioned nearly so often in the smart phone and tablet arenas. That’s because Microsoft’s Windows OS is still searching for a tablet to call its own. Longtime Microsoft partner HP, abruptly switched course: after Microsoft CEO Steve Ballmer got on stage and demonstrated Windows 7 running on HP’s slate, HP bought Palm and earlier this week acquired the assets of Phoenix Technologies which makes an operating system for tablets. That leaves Microsoft to promote its business centric Windows 7 phone which will run Xbox LIVE games, Zune music and the company’s Bing search engine. All is not lost for Microsoft: longtime “frenemy” Apple CEO Steve Jobs said recently that the new iPhone 4G will run Microsoft’s Bing fueling speculation that Apple will drop support for Google’s search engine. Both Google and Apple are still competing with Microsoft in other markets like operating systems, games and application software to name a few, but that’s another story.
There are other competitors in the smart phone and tablet markets but you’d hardly know it from the headlines. Research In Motion’s (RIM) Blackberry is still a market leader. But Apple and Google continue to dominate the coverage. I guess high technology just like sports revels in a classic rivalry. And this one promises to be a hard fought struggle.

Everyone loves a good battle. And no market segment has experienced more bellicosity than the operating system arena.

For the last two decades, Microsoft Windows was the undisputed, dominant player with 90% of the desktop OS market share. Today, Microsoft Windows is still the most widely deployed operating system. But its dominance is no longer undisputed.

Microsoft faces an array of formidable challengers including Apple, Google and Ubuntu. Google’s initiatives over the last two years have obviously attracted a good deal of attention – just as they are meant to do.

The recent media coverage and talk of the looming battle between Google’s Chrome OS and Microsoft Windows 7 and Office 2010 conveniently ignores two important facts: 1) the Chrome operating system doesn’t ship until sometime in 2010, and 2) when it does debut it will initially run only on low-cost Netbooks, a miniscule if rapidly growing part of the market.

Other considerations are not as easily answered: What tangible, material impact will this rivalry have on customer deployments? Will Google’s entrance into the Netbook OS market really force Microsoft to slash prices and cut into its Windows profits, the heart and soul of its business? And who besides the press, Google and Microsoft really cares?

It is abundantly clear that Google and Microsoft — each of whom dominates in their core markets – are desperately attempting to encroach on one another’s turf. Google is a convincing leader in the search engine and online advertising market. And Microsoft continues to be the market leader in operating systems and office productivity applications. The sparring has been exacerbated and honed by the ongoing economic downturn. Hence, the series of recent one-upmanship maneuvers. Microsoft announces it’s moving up the release date for Windows 7 and Google responds with headlines of its own about directly competing with Windows. Google said it will partner with top OEM manufacturers like Acer, HP and Lenovo to port Chrome OS onto their Netbook platforms by the second half of 2010. Microsoft counter-punched by releasing details about some of upcoming Office 2010 applications becoming untethered.

Microsoft is aiming straight for Google with its new Office Web Applications. Microsoft Word, PowerPoint, Excel and OneNote are heading to the cloud in scaled down versions of the immensely popular software that will be browser based and completely free. And although details have been sketchy at best, sources within Microsoft indicate company intends to meld the Office platform across traditional PCs and servers, the Internet and smart phones.Microsoft did release new details about Office at its Worldwide Partners Conference (WPC) in New Orleans last week.Among the disclosures: Office 2010 – due out in the first half of next year – will include a free Web edition and it will finally offer interoperability with the Mozilla Firefox and Apple Safari browsers. The Office 2010 Web edition will also incorporate “lite” versions of Word, PowerPoint, Excel and OneNote. Microsoft will likely release more details at its Worldwide Partners Conference (WPC) in New Orleans, this week.

Microsoft and Google continue to circle each other like the battle scarred veterans they are –looking for the weak spot and the right moment to attack, hoping to score a direct hit and encroach on the other’s turf in a meaningful way – e.g. stealing sales and market share.

In truth, neither company has drawn first blood, although not for lack of trying.

Google vs. Microsoft: A Historical Perspective

The rivalry between Google and Microsoft dates back several years. Both covet what the other has and both have met with limited success in their attempts to extend their empires beyond their core competencies and revenue streams. While Microsoft has for the last few years been unceasing in its efforts to penetrate the online search engine and advertising market, it still derives 50% of its revenue from the Windows and Office platforms.
Microsoft’s Bing search engine debuted earlier this year to generally positive results. In fact, Bing is Microsoft’s best effort to date but it remains to be seen how much impact it will have on Google.

For its part, Google launched its first serious offensive strike at Microsoft’s dominance in the operating system and applications arena in early 2006 with Google Apps, a set of web-based and desktop applications. Google Apps consists of Gmail, Google Maps, Google Docs & Spreadsheets and Google Calendar. The company continues to bolster the functionality of the platform, and in 2007-2008 added Standard and Premier offerings that incorporate remote and mobile access capabilities, email migration tools and stronger online technical support. The Standard version of Google Apps is free and the Premier version lists for $50 per seat.

Microsoft & Google by the Numbers

From a financial standpoint, both Google and Microsoft remain healthy, although like every other ITfirm, both have felt the effects of the continuing economic crunch. So far this year, Microsoft has laid off 5,000 employees; this is the first substantial layoff in the company’s history. More worrisome for the Redmond, Washington giant is that its Quarterly Revenue and Quarterly Earnings Growth fell into negative categories (See chart below) from the 2008 to the 2009 third quarter ended March 31. The company hopes that Windows 7 (due out on October 22) and Office 2010 will spur sales and revenue and reverse the decline. At the same time, Microsoft knows it must diversify and so it looks to the Web and the emerging cloud computing market, where companies like Amazon and Google dominate.

Google, for its part has yet to loosen Microsoft’s hold in the rich operating systems and office productivity suite. Google Chrome is free and as such does not generate any revenue for the company but that may change because Netbook sales are poised to explode over the next 12 months and could provide Google with the needed momentum to establish itself as an applications provider.In the meantime, Google hopes that the good news from its latest financial earnings (see chart below) and its aggressive high profile marketing strategy will generate a buzz and create pent-up demand for Chrome in the run-up to its 2010 debut.

Performance Criteria – Q3 2009
Google
Microsoft
Market Cap: $135 billion $206.7 billion
Profit margin: 20.6% 25.9%
Operating margin: 32.6% 37.1%
Total Cash: $19.3 billion $24 billion
Debt: $0 $2 billion
Return on Assets: 14.2% 20.3%
Return on Equity: 16.% 42.5%
Annual Revenue: $22.7 billion $60.4 billion
Annual Net Income: $4.6 billion $22.5 billion
Quarterly Revenue Growth: 2.9% -5.6%
Quarterly Earnings Growth: 19% -32.2%

***Editor’s Note: Google’s fiscal year coincides with the calendar year, while Microsoft’s fiscal year begins on July 1. The above figures represent Google’s most recent second quarter ended June 30.

Future Prospects
What does this posturing and verbal sparring mean for corporate and consumer customers? In the near term, Google and Microsoft’s dueling headlines and pronouncements will have very little impact on customers in terms of platform commitment and purchasing decisions. The ongoing rivalry does mean that neither company can relax or relent for a Pico-second. Each must continue to deliver first-rate, full featured, bug-free products that deliver ease-of-use and integration and interoperability with existing applications and platforms. And both companies must stick to their announced timetables and deliver on their promises, lest one or the other exploit the opportunity.
Microsoft can’t afford a repeat of the lack of backwards application compatibility that plagued its much-maligned Vista desktop. At the same time, Google’s hopes for penetrating the applications and OS market rest on the functionality of its offerings beyond the simple basics that are adequate for Netbook sales.
Ultimately, corporate and consumer customers will demand and receive high performance products at a reasonable price – or they’ll simply sit on their wallets.
The biggest winners in this ongoing war may be the end users. And isn’t that a refreshing change?