Semi-open Android getting more closed by the minute

From day one, I’ve remarked that Android is not really an open open source project. It promised openness but didn’t deliver, instead pursuing a strategy of semi-openness to gain market share against its proprietary rival. That Google tightly controlled the Android community shouldn’t be surprising since — for any firm — the point of funding (and controlling) a sponsored community is to gain benefits not available to other firms.

This wasn’t just my opinion, but was supported by a detailed study by Liz Laffan of Vision Mobile, a European consulting firm. (I thought the study was a clever idea — not just because it leveraged my typology of firm-controlled open source communities — and the press did as well). In comparing the governance of mobile open source communities, Laffan found Android was by far the least open of eight mobile-related communities. She concluded:

Android’s success has little to do with the open source licensing of the public codebase. Android would not have risen to its current ubiquity were it not for Google’s financial muscle and famed engineering team. Development of the Android platform has occurred without the need for external developers or the involvement of a commercial community.

Google has provided Android at “less than zero” cost, since its core business is not software or search, but driving ads to eyeballs. As is now well understood, Google’s strategy has been to subsidize Android such that it can deliver cheap handsets and low-cost wireless Internet access in order to drive more eyeballs to Google’s ad inventory.

More importantly, Android would not have risen were it not for the billions of dollars that OEMs and network operators poured into Android in order to compete with Apple’s iconic devices. As Stephen Elop, CEO of Nokia, said at the Open Mobile Summit in June, 2011, “Apple created the conditions necessary for Android”.

As Laffan notes, the one way that Android was open was the provision of source code. But that's changed too, as Ron Amadeo documented Sunday on the Ars Technica website:

Google has always given itself some protection against alternative versions of Android. What many people think of as "Android" actually falls into two categories: the open parts from the Android Open Source Project (AOSP), which are the foundation of Android, and the closed source parts, which are all the Google-branded apps. While Google will never go the entire way and completely close Android, the company seems to be doing everything it can to give itself leverage over the existing open source project. And the company's main method here is to bring more and more apps under the closed source "Google" umbrella.

There have always been closed source Google apps. Originally, the group consisted mostly of clients for Google's online services, like Gmail, Maps, Talk, and YouTube. When Android had no market share, Google was comfortable keeping just these apps and building the rest of Android as an open source project. Since Android has become a mobile powerhouse though, Google has decided it needs more control over the public source code.

For some of these apps, there might still be an AOSP equivalent, but as soon as the proprietary version was launched, all work on the AOSP version was stopped. Less open source code means more work for Google's competitors. While you can't kill an open source app, you can turn it into abandon ware by moving all continuing development to a closed source model. Just about any time Google rebrands an app or releases a new piece of Android onto the Play Store, it's a sign that the source has been closed and the AOSP version is dead.

In some ways, this is looking like IBM’s WebSphere. IBM has a proprietary software package layered on top of an open source Apache HTML server engine: yes, the engine is useful, but it’s not complete for the commercially important applications. (BEA’s — now Oracle’s — WebLogic plays a somewhat similar role). However, IBM was open about what it wanted: in our 2006 paper, Scott Gallagher and I noted how IBM was quite open about its partly-open strategy.

What’s different here is the suggestion by Amadeo (this week) and others (previously) of an intentional bait and switch strategy:

Vic Gundotra, recalling Andy Rubin's initial pitch for Android, stated:

He argued that if Google did not act, we faced a Draconian future, a future where one man, one company, one device, one carrier would be our only choice.

Google was terrified that Apple would end up ruling the mobile space. So, to help in the fight against the iPhone at a time when Google had no mobile foothold whatsoever, Android was launched as an open source project.

In that era, Google had nothing, so any adoption—any shred of market share—was welcome. Google decided to give Android away for free and use it as a trojan horse for Google services.
…
Today, things are a little different. Android went from zero percent of the smartphone market to owning nearly 80 percent of it. Android has arguably won the smartphone wars, but "Android winning" and "Google winning" are not necessarily the same thing. Since Android is open source, it doesn't really "belong" to Google. Anyone is free to take it, clone the source, and create their own fork or alternate version.

The article documents how Google uses its APIs and app store to punish any attempt to fork the code. (Yes, the Kindle is a successful fork, but without the Google APIs it will only have a fraction of the 850,000+ Android apps.)

Amadeo concludes:

While Android is open, it's more of a "look but don't touch" kind of open. You're allowed to contribute to Android and allowed to use it for little hobbies, but in nearly every area, the deck is stacked against anyone trying to use Android without Google's blessing. The second you try to take Android and do something that Google doesn't approve of, it will bring the world crashing down upon you.

No accountability without choice

I went swimming this morning with a pro triathlete. It wasn't my intention, but there’s a triathlon in town tomorrow and a number of pro athletes are visiting and working out.

I got talking with her manager/trainer, who said they live in Florida. Because the triathlons are around the country (and the world), they can live anywhere they want. Like many athletes, they (and other triathletes) live in tax-free Florida, while others live in Texas.

The triathlon was invented in San Diego and popularized in Hawaii, and handful of professional triathletes still live here. But — between taxes and housing costs — most find it cheaper to live elsewhere and pay an accountant $5-10K a year to keep track of various state laws that require they pay the nonresident athlete tax for the days they work in high-tax states. The St. Louis Cardinals didn’t care whether the Tigers or Red Sox make the World Series, but clearly the Red Sox are better off playing three games in St. Louis (top rate 6%) than in Los Angeles (top rate 10.3%).

Pro athletes can arbitrage tax rates (for endorsements) and live where they want (off season). San Diego native Phil Mickelson was roundly criticized for the (factual) observation that he pays a 60%+ tax rate living in California and was considering living elsewhere.

Entertainers can also live anywhere also, and this should work well for musicians. However, it appears that actors still tend to cluster in Los Angeles and New York City, two of the highest tax jurisdictions in the country. I’d argue this is because while athletic performance is directly measurable, acting performance is not: do we care which 25-year-old starlet or 45-year-old aging acting star is cast in a big-budget movie? Probably not. Actors have to stay in the network, attending parties etc., so the decision-makers don’t forget them when casting the next movie, TV show or high-visibility stage production.

Still, other types of professionals and business owners lack job mobility. At one extreme, Silicon Valley is largely about access to venture capital (since it has no monopoly on smart people or good universities). At the other extreme, restaurants and dry cleaners can’t move to a low tax state and take their customers with them. With its unfavorable business climate, California will hold these two extremes and has been driving out the average business in the middle (such as manufacturing).

California is now a one-party system and the ruling party assumes it can charge what it wants. I have a fairly low salary for a b-school professor and I’m at the 9.3% marginal tax rate. This used to be the tops until they instituted two millionaire surcharges (bringing the maximum rate to 13.3%), the latest being including a retroactive tax increase passed last year to capture Facebook IPO gains.

Even worse, California taxes capital gains as regular income, and thus the long-term capital gains rate is higher than New York, France, Finland or Sweden (let alone notorious tax havens like Hawai‘i and D.C.) If you are a Google or Facebook founder, it isn’t going to change your standard of living, but trying to sell a $1-2 million business to retire would leave a lot less money to live on in your old age.

In a one-party system, there is no accountability for bad ideas — only for overt corruption. So if people can’t have a choice of economic policies, what remains is the option to vote with their feet ala Hirschman’s Exit, Voice and Loyalty†. Despite increasing centralization to the national government, the US — like Canada and to some degree Germany — has a Federal system that allows policy experimentation and competition of ideas.

New York and Massachusetts paid a price (in terms of employers and job growth) for their high tax policies — but apparently not enough of a price to cause them to rethink their policies. Like California, they have a small cluster of high end jobs (Wall Street and drug companies respectively), the immobile local jobs and have discouraged or driven away the jobs in the middle.

Since Hollywood’s business model is in decline, California’s ability to pay its bills seems tied to what fraction of the global tech economy remains in Silicon Valley. No matter how much you believe in Silicon Valley’s uniqueness, this is a bold (if not foolishly optimistic) bet on a small fraction of the state’s 38 million people. However, with term limits, politicians have a short-term mentality and are betting they will be long gone if something bad happens 5 or 10 years down the road.

† Writing in 1970, Hirschman (p. 84) assumed that a lack of voice would cause people to quit organizations but they cannot exit the “state” (i.e. national government). But this was before intra-EU job mobility and even the flight of jobs from the northeastern to the southeastern regions of the U.S.

Pebble: it's about the apps

With a US ad budget approaching $1 billion, Samsung is now plastering the airwaves (including my Sunday football games) with ads for its $300 Galaxy Gear. Analysts say it’s a better ad than product.

My gripe is that it implies that Samsung invented the first practical smartwatch with its $300 Galaxy Gear. But any technophile worth his (or her) salt knows that the modern category begins with the record Kickstarter success story, the Pebble.

Still, Samsung’s ad barage is going to develop the product category and make people aware that this option is available. Today Best Buy gives online customers a chance to compare the various products side by side — and soon this will come to the physical stores, even if both products will be shut out of the Apple Store.

But what will the smartwatch pioneer do, with its $35m in outside funds dwarfed by the big boys? Pebble founder Eric Migicovsky says the story is in the apps:

The next step for us is how we can incentivize and encourage developers to hack on Pebble and create new interfaces. We’ve already started building them, but there’s a ton of hardware out there. There’s Fitbit and Jawbone and all this fitness stuff that’s really built on top of the exact same hardware that Pebble is built on, except those platforms are not open.

So with Pebble, say for example you’re a researcher working in a university on an accelerometer-based gesture app. Instead of having to build your own hardware, you can now build an app for Pebble and market it to the existing user base.

Not every potential platform attracts third party apps. If I were at Pebble hoping to be saved by apps, my first step would be to emphasize (and improve) the cross-platform compatibility against Apple and Samsung.

I'd also target the internal developers of big corporations. The major app vendors (e.g. iHeartRadio) will gladly do what it takes to provide compatibility separately with the Gear and (rumored) iWatch, but corporate developers would appreciate having one “watch” that supports both Android and iPhone clients.

Punishing your captive shareholders

Although public companies are not as accountable as they should be, in the long run failure or malfeasance has consequences. Managers who treat shareholders badly get fired, or people dump the shares — depressing them enough to bring in a raider who will shake things up.

Unfortunately, nothing like that happens when it comes to accountability in government agencies, as this week’s semi-shutdown makes clear.

The Office of Personnel Management (an Executive Branch agency) encouraged agencies to shut off their websites when the shutdown came. The Census Department, NASA and Park Service are offline, although the Library of Congress and IRS (despite previous threats) are still functioning. Julian Sanchez of the Cato Institute referred to this as an online “Washington Monument Syndrome.”

For anyone who’s run a business and is IT literate knows that it costs more money to take down a site than to leave it up. How many sites have you seen that haven’t been updated in weeks, months or even years? For many sites, the government could be shut down for 3 or 6 months and the content would still be available and useful if they left the servers running.

At Reason, Brian Doherty notes the irrationality of this approach:

If the “inessential” public-facing Web pages are hosted on the same systems you’ve got to keep up and running for other “essential” back-end purposes—meaning you don’t get to save the security or electricity overhead— then the cost of having IT go through and disable public access to the “inessential” sites could easily be higher than any marginal cost of actually serving the content. But the guidance here seems to require agencies to pull down “inessential” public-facing content even when this requires spending more money than leaving it up would. In the extreme case, you get the bizarre solution implemented on the FTC site: serve the content, then prevent the user from seeing it!

Or, as my local paper quoted one expert:

To many, the website shutdowns have the feel of politics. Public relations expert Erica Holloway of Galvanized Strategies, who works with clients on their websites, said it makes no sense to shut down the sites otherwise.

“To withhold information from the public that the public has a right to have is wrong,” Holloway said. “And if there is no budgetary reason behind it, if it isn’t monetary, then it looks like what it is: A giant temper tantrum.”

But since the tantrum included hiring people to put up barricades at the World War II memorial —“to make life as difficult for people as we can” — I guess we shouldn’t be surprised.

In a parliamentary system such as our European friends enjoy, such tantrums have consequences: it's hard to imagine David Cameron or Andrea Merkel pulling such a stunt. But with a fixed-term (and term limited) executive such as in the US or Mexico, it’s apparently feasible (if not desirable) to punish one’s shareholders.

Unimaginable reversal of market share

As part of my job promoting our school and its programs, I visited three college campuses in Boston this week (plus two more schools related to research).

My last stop before flying home was Wellesley College, which I last visited in a previous century as an MIT student taking a music elective my semester prior to graduation. As with other stops, this took me to the science building. The Wellesley Science Center has a large open interior space that reminds me a little of the Hyatt Embarcadero in SF (only much smaller).

As I wandered through the common area, I kept noticing young women typing away on their Mac laptops. After a while, I decided to count. In the cafe area, library and other open area of the science center, I counted 22 laptops: 19 Macs, 1 HP, 1 Lenovo, 1 Dell. (This doesn’t include the Macbook Air in my bag).

Admittedly college isn’t representative of society or an expensive private college representative of colleges. Still, the numbers were stunning.

When my original dissertation topic fell apart in 1997, I decided to study how people were abandoning the Mac. Apple’s overall US share (nearly 15% in 1993) had fallen under 5%. Even in marketing organizations, Macs were being replaced by Windows (aided by Aldus and Quark who launched their businesses on the Mac but by then were platform indifferent).

To get started, I did an exploratory study of organizational (de)adoption decisions, which for access reasons included some universities. Most universities were pushing out Macs, by requiring technologies (such as email) that lacked a Mac client or refusing to support or fund Mac users. (I spent 8 years at UCI’s business school, which banned Mac purchases in the name of efficiency and standardization).

In 1996, I even started a website to keep track of stat software that was still being updated on the Mac — so that those of us who needed stat software could stay on the Mac. Stata stayed with us through the darkest days (and won my unending loyalty), but now most of the major math and stat packages are dual platform (with the exception of the troglodytes at SolidWorks).

Back in 1997, I wouldn’t have imagined it possible to find a pocket — any pocket — where Macs would be dominant again. The last one to bail from the platform was supposed to turn off the light, but instead people started flocking back and turning up the light. At some points the Macs will run iOS (instead of OS X or OS 8) but it looks like they'll be around for another decade or two.