All Posts in Policies and Procedures

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Bob Metcalfe has been predicting the imminent collapse of the Internet in these pages. Since your employer looks to you for technical expertise and advice, and since Dr. Metcalfe is a Recognized Industry Pundit (RIP), you’re probably worried about having recommended building that big Web site.
I’ve decided to offer a different perspective on the problem so you can trot out a second RIP to counter the effects of the first. (Also, if Dr. Metcalfe and I quibble in print you get to gripe about the incestuous nature of the press in Ed Foster’s gripe line, post items in our Forums on InfoWorld Electric (www.infoworld.com) and otherwise feed the liberal media conspiracy.)

Anyhow …the Internet scares people. Commonly described as an anarchic agglomeration of unplanned interconnections, it makes no sense to those who believe central planning is the key to quality.

Many of those same people, Dr. Metcalfe included, also say they believe in the power of laissez-faire capitalist economics. In other words, they believe in the power of Adam Smith’s “invisible hand” that uses market forces to regulate the interplay of independent agents.

From the perspective of general systems theory, this is nothing more than the use of negative feedback loops to create stable systems. (If you’re not familiar with the concept, it just means that inputs listen to outputs, adjusting themselves when the output drifts off course.)

Laissez-faire capitalism says shortages lead to higher prices which reduce demand, eliminating the shortage. Higher prices motivate an increase in production capacity, increasing supply which then reduces price, increasing demand. The result: A self-regulating system with no need for external controls.

Why does Dr. Metcalfe, who believes in this kind of self-regulation for the economy, not believe it will work for the Internet? After all, money comes in along with increased demand. Increased demand leads to supply shortages (poor response time). These shortages certainly can result in higher prices. They also can result in more companies getting into the business, and in existing Internet providers increasing the bandwidth they make available. It’s a pretty basic example of the very same kind of self-regulated economic system most cherished by the all-government-regulation-is-bad crowd.

This doesn’t mean the Internet won’t catastrophically fail this year. Laissez-faire capitalism breaks down in several different circumstances. Here are two:

Any time individuals or organizations compete for a common resource, market forces just plain don’t work.

This is called “First pigs to the trough.” It’s also known as the tragedy of the commons. In merry olde Englande, farmers grazed their cattle on public grazing land – the commons. After awhile, some farmers figured out the more cattle they grazed on public land the more they profited. When all farmers figured it out the cattle overgrazed the commons, ruining it.

Market forces don’t regulate use of a commons – market forces ruin it, leading to the need for external regulation by, for example, the government. Regulation isn’t always a bad thing, despite current political cant.

Another, very interesting way negative feedback loops (including pure free-enterprise economics) lead to unstable results comes from feedback delays. Bring up your spreadsheet and model the “logistic” equation (a very simple negative feedback system): v(t+1)=kv(t)*(1-v(t)). Plot it for a hundred values or so, starting with k=1.1 and v=.01. You’ll see a smooth s-shaped curve.

Change k. Between 2 and 3.5 the curve oscillates. From 3.5 to just over 4 it becomes chaotic, jumping around randomly. Somewhere between 4.01 and 4.001 it crashes to extinction. The lesson: Once feedback isn’t immediate, the value of a constant changes not just the scale of a system but its very nature. The results are unpredictable.

(You’ll find other fascinating tidbits like this in the excellent book, A Mathematician Reads the Newspaper by John Allen Paulos.)

So Dr. Metcalfe may be right – the Internet could turn out to be an unstable, chaotic system.

But I doubt it. I have more faith in free enterprise than that.

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Back during my teenage years in the 60s, I vaguely remember threatening to “take my business elsewhere” to merchants who looked askance at my fringed vest and bellbottoms. (In retrospect they had a point, but luckily all photographs of that period have been blissfully mislaid.)

It scares me to think of the IS managers who must have missed having similar experiences. Take as an example Microsoft’s elimination of concurrent licensing for small businesses. According to fellow InfoWorld columnist Ed Foster, customers are up in arms about this. They’re bothered that Microsoft can so easily force them to spend more, just to stay legal.

When technical matters leave you confused, try to find parallels in other industries. So let’s imagine General Motors decided to make leasing illegal. Would you (a) complain about their unfair business practices; (b) take your lumps and buy one of their cars when you’d really wanted to lease; or (c) shake your head at their stupidity and take your business to Ford?

Microsoft may have a monopoly position in the minds of many IS managers, but they don’t have a monopoly in the marketplace. WordPerfect and WordPro have just as much feature-bloat as MS-Word, and I’m confident Novell and IBM/Lotus would be more than happy to take your money.

Face facts: most IS Managers buy Microsoft products because that’s an easy way to make a safe decision in what has become a commodity marketplace. You have alternatives.

Take the emotion out of selecting your basic PC software, and list your selection criteria. Features? They all have lots of features. Ease of use? They’re all Windows programs – like it or not, Windows imposes a certain sameness to the user interface. Speed? They’re Windows programs – speed is a thing of the past.

Right now, most IS Managers have made “product has a long-term future” their only criterion for selecting a word processor, spreadsheet and database – the basic three applications. By doing so they’ve created a self-fulfilling prophesy guaranteed to transfer money from their company coffers to Microsoft.

Take the emotion out of selecting your basic PC software: where’s the risk in taking your business elsewhere? Novell may not find a buyer for WordPerfect and it may vanish from the landscape? Could happen. Then you’d have to convert to something else at a HUGE EXPENSE!

How big? That depends on how you do cost accounting. My guess: the difference between what you’d spend anyway on a version upgrade and the cost of a “competitive upgrade” (what you really pay when you change products) just won’t be that great.

Given the dull sameness of all Windows software, you won’t have a lot of end-user retraining to worry about. At most you’ll have to give your end-users a one-hour orientation.

How about your ability to exchange documents with customers and suppliers? MS-Word has become the de facto standard word processing format, after all.

True enough. Here again you have alternatives, though. You can send “Rich Text Format” files (extension of .rtf) instead – all word processors can read them. You can send Adobe Acrobat files instead, if you like – the Acrobat reader is widely available.

Or, start using HTML as your standard document storage format. You lose some formatting ability you rarely use in the first place. You gain plenty:

You can exchange documents with the rest of the known universe – everyone can view them using any Web browser.

You can manage all company documents using inexpensive “Intranet” technology. It won’t be hard to let users publish their own documents on your internal Web servers as easily as you may use shared directories now.

You’ll be able to choose from dozens of HTML-authoring tools, letting you buy in a highly competitive marketplace – always good for the corporate checkbook.

Microsoft certainly hasn’t acted in the best interests of its customers. It doesn’t have to – it may choose to as a marketing tactic, but it has no obligation to do so.

Don’t like it? Take your business elsewhere. That’s the nature of a capitalist economy, and the requirement for maintaining one.

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