Tim O’Reilly’s new book. He tries to grasp how technology affects the current business environment. He then proceeds to look at the overall economic and social implications. You can get some of the flavor of it by listening to his interview with Russ Roberts. And here is more O’Reilly, where he says,
Microsoft lost leadership because they had taken away the opportunities for their developer ecosystems, so those developers went over to the Internet and to Google. Now, we see this same thing playing out again.
I am not persuaded by these sentences. The Internet was quite a powerful phenomenon. I cannot envision an alternative history in which Microsoft does not lose a lot of its commanding position because of the Internet. You can make a case that Bill Gates could have positioned Microsoft better had he grasped the significance of the Internet sooner, but that would not have changed the game, only made Microsoft a more agile player. And you could argue that whatever Microsoft lost in terms of time, they made up for in terms of spending, so that they wound up doing about as well in the Internet environment as one could reasonably expect.
Overall, I disagree with O’Reilly quite a bit. Early in the book, he writes,
there are far too many companies that are simply using technology to cut costs and boost their stock price
Take this rhetoric and apply it to trade, and it could come from the lips of Donald Trump. In fact, good economists will explain that trade and technology are so intertwined as to be indistinguishable as economic phenomena. Austrian capital theory says that capital is roundabout production, i.e., roundabout trade. Suppose an economy consists of farm equipment and crops, and you want to explain its efficiency. Do you give the credit to farmers applying technology or do you give the credit to trade between the manufacturing sector and the agricultural sector? It’s the same phenomenon, just described differently.
Russ Roberts did not go after O’Reilly on the anti-corporate demagoguery. A charitable interpretation was that Russ wanted to focus on the Internet “platform model” that O’Reilly waxes eloquently about. A less charitable interpretation is that Russ switched to Tyler Cowen’s philosophy of interviewing.
I’m not persuaded either. Microsoft has kept their Office and Windows franchises. They are successful in the cloud platform business (more so than Google):
https://www.cnbc.com/2017/04/27/microsoft-azure-growing-faster-than-aws-google-cloud-behind.html
And have a large share of the developer market (especially for internal IT development) with their development tools, platforms, and servers. The one thing they screwed up badly was smart phones. Ten years ago, before the IPhone and Android, Microsoft had a healthy share of the smart phone market. But they were slow to adapt, and the Nokia purchase was a complete failure. On the other hand, they’ve been successful combining their desktop and touch-screen tablet technologies to produce popular ‘2-in-1’ computers that Apple can’t match. But the bottom line is that I agree — I don’t see where MS could have done a whole lot better in the Internet era than it actually has.
You may be right about Russ’ interview style. I think I remember an earlier Econtalk interview with O’Reilly where he did push back and it was a bit tense. It’s probably best just to let such things go in most interviews.
I lost a lot of respect for O’Reilly in previous interviews. Hopefully I’ll find him less disappointing in this one.
On Microsoft and the internet, I do recall before the antitrust nonsense that Microsoft was trying to blur the lines between the browser and Windows. The government did not like that one bit. However, when you look at the most successful internet devices today, those running Android and iOS, that’s exactly what they’ve done. While they have browsers, most people use the apps.
One wonders how much better Microsoft would have adapted to the internet without the DOJ hovering over it.
Should *every* interviewer be tough? Isn’t it better to have a division of labor: some tough, some soft and encouraging?
Microsoft’s O/S major-mark releases were on like *five year* schedules. It’s not even necessarily that they didn’t want to play in Internet time, they just knew they couldn’t, or shouldn’t. By 2000ish, they had “.NET” which was what passed for that, for them.
The funny thing is, I’ve now been present at several Cowen Conversations™, including the one with Summers (who was not at all in top form), and, well, I think it’s fair to say Cowen more than occasionally strays from the doctrinal implications of that purported interview philosophy. He does indeed push back with challenging follow-ups, but gently, and unlike an attack dog, knows how to let go, and let the (usually disappointing) second answer speak for itself.
Look, access has a price, but a semi-plausible cover story can sometimes lower that price a little.