Robert X. Cringely

In the middle of a pissing match between the President and Congressional leadership it’s good to remember that the United States isn’t the only government that seems to have lost touch with reality. I was reminded of that today when I read this story about the contaminated water problem at the Fukushima Daiichi nuclear power plant in Japan. Now here’s a government that is truly paralyzed!

The story from Japan Times, if you choose to read it, says Japanese Prime Minister Abe is reaching out to foreign experts in an attempt to deal with the problem of radioactive cooling water that is accumulating in hundreds of makeshift tanks that are now beginning to leak. “We want your expertise!” Abe proclaimed in a speech given in English.

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Almost every week some reader asks me to write about Bitcoin, currently the most popular so-called crypto currency and the first one to possibly reach something like critical mass. I’ve come close to writing those columns, but just can’t get excited enough. So this week when yet another reader asked, it made sense to explain my nervousness. Bitcoin is clever, interesting, brilliant even, but I find it too troubling to support.

But first, why should you believe me? You shouldn’t. Though I’m year after year identified by the Kauffman Foundation as one of the top 50 economics bloggers in America, that only means I get to hang out occasionally with the real experts, eating Kansas City barbecue. Unlike them I’m not an economist, I just play one on TV. So don’t take my word for anything here: just think about the arguments I present and whether they make sense to you.

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My friend Paul Tyma (ex-Google, creator of Mailinator, occasional stand-up comic) released a mobile product this week and one thing I find interesting is the difference between how he describes it and how I describe it.

Paul: "Let’s say you had an important meeting with someone you really want to impress. A smart person would probably spend a non-trivial amount of time scouring the Internet for information about that person. What are they tweeting about? If you’re LinkedIn to them, then go check out their LinkedIn profile. If you were really interested you might go look up their house on Zillow. Or see how their company’s stock price faired today on Yahoo Finance".

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The Innovator’s Dilemma, a 1997 book by Harvard professor Clayton Christensen, made the point that successful companies can lose their way when they pay too much attention to legacy products and not enough attention to new stuff. They are making so much money they either don’t see a competitor rising up or are too complacent to feel threatened. In either case the incumbent generally loses and the upstart (usually one of many) generally wins. The best way for successful companies to avoid this problem is by inventing the future before their competitors do.

We see this pattern over and over in high tech. Remember Lotus? Remember Word Perfect? Remember Borland? And it’s not just in software. Remember IBM sticking too long with the 80286 processor? Remember the Osbourne Executive?

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Wednesday at the TechCrunch Disrupt conference in San Francisco, Yahoo CEO Marissa Mayer presented her company’s side of fighting the National Security Agency over requests to have a look-see at the data of Yahoo users. It’s a tough fight, said Mayer, and one that takes place necessarily in private. Mayer was asked why tech companies had not simply decided to tell the public more about what the US surveillance industry was up to. "Releasing classified information is treason and you are incarcerated," she said.

Go directly to jail? No.

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Some readers have asked me for a post on the new Apple iPhones announced two days ago. I’ll get to that in time but prefer to do so when I actually have an iPhone 5S in my hands because I have a very specific column in mind. And no, it’s not the column you think it is. But this is still a good time to write something about Apple in general, which is how Cupertino appears to now stand at a crossroads.

There is a world of difference between Microsoft and Apple but one way they are similar is in facing a generational change. Another way they are similar is in having robust legacy businesses that both put a drag on such change (who needs change, we’re doing great!) and make it easy to wait or at least to go slowly. But no matter how much money they have in the bank, each company must eventually come to terms with how it is going to move forward in an evolving market. Neither company has.

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A good friend of mine called Microsoft buying Nokia "two stones clinging together trying to stay afloat". I wouldn’t go that far but I don’t think the prognosis is very good. On the other hand, I’m not sure it has to be good for Microsoft to achieve its goals for the merger. Huh?

This is why you come here, right, for my lateral thinking? I don’t think Nokia has to succeed in order for Microsoft to consider the acquisition a success.

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A couple weeks ago when Google introduced its Chromecast HDMI dongle I wrote a column wondering whether it was really such a good product or simply good demoware? Now that I have my own Chromecast and have been playing with it for a few days I have to admit I was wrong. Chromecast appears to be every bit as good as Google claims. That’s not to say it’s perfect (more below) but pretty darned good.

What I really doubted was Google’s claim that the Chromecast could turn on your HDTV, switch the HDMI input, and throw content onto the big screen all in one seamless succession of events. It wasn’t that any of these tasks were especially difficult to do, but that to do them all on every HDTV would require more remote control capability than I knew existed in any current device.

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This past weekend I was invited to spend an hour talking about Silicon Valley business with a group of MBA students from Russia. They were on a junket to Palo Alto from the Moscow School of Management Skolkovo. I did my thing, insulting as many people and companies as possible, the students listened politely, and at the end there were a few questions, though not nearly as many as I had hoped for.

If you've ever heard one of my presentations the most fun tends to take place during the Q&A. That's because I can't know in advance what a group really cares about but in the Q&A they can tell me and sometimes we learn a thing or two. One question really surprised me and inspired this column: "In Silicon Valley," the MBA student asked, "it seems that mentoring is an important part of learning business and getting ahead, yet mentoring is unknown in Russia. How does it work when there is no obvious reward for the mentor? Why do people do it?"

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So Steve Ballmer is leaving Microsoft a year from now: what kind of schedule is that? It’s one thing, I suppose, for a company to point out that it has a retirement policy or a succession plan, or even to just give the universe of potential Microsoft CEOs a heads-up that the job is coming open, but I don’t think that’s what this is about at all. It’s about the stock.

Like in baseball, when all else fails to get the team out of a slump, fire the manager. And sure enough, Microsoft shares are up eight percent as I write. Ballmer himself is $1 billion richer than he was yesterday. I wonder if he had cleaned out his desk this afternoon whether it would have been $2 billion?

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While Mary Alyce and the boys were in Theater 7 this weekend watching Percy Jackson: Sea of Monsters ("Needs more monsters," says Fallon, age 7) I was in Theater 2 watching Jobs, the Ashton Kutcher film about Steve Jobs ("Has enough monsters," says Bob, age 60).

I know the Jobs story fairly well having, well, lived some of it, but people have been asking me about the film so I thought I should check it out. Critics have not been kind and Steve Wozniak said he wouldn't recommend it. I can see why.

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Fifty-two years ago, three days before he left office and retired from Washington, U.S. President Dwight D. Eisenhower addressed the nation on television with what he called "a message of leave-taking and farewell, and to share a few final thoughts…"

This came to be called Eisenhower’s military-industrial complex speech and was unlike any other address by Eisenhower or, indeed, by any of his predecessors. You can read the entire speech (it isn’t very long) here, or even watch it here, but I’ve also included below what I believe to be the most important passage:

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There are several new data points this week in the ongoing cratering of IBM as an IT vendor. The state of Pennsylvania cancelled an unemployment compensation system contract that was 42 months behind and $60 million over budget. Big Blue has been banned from the Australian state of Queensland after botching a $6.9 million SAP project that will now reportedly cost the people of Queensland $A1.2 billion to fix. That’s some botch.

Credit Suisse analyst Kulbinder Garcha says IBM has a cash flow problem and downgraded the stock. At IBM’s Systems & Technology Group, management announced to employees a one week mandatory furlough at the end of August or beginning of September. And finally, I’m told that there is now a filter on the IBM corporate e-mail system that flags any messages that contain the word Cringely. I’m flattered.

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A few days ago I promised "tomorrow" a column about the future of data security. Then, just as the electrons were flowing on that DefCon column, I bought on eBay a 1978 GMC Royale motorhome in Bismarck, North Dakota that Channing and I have been trying to bring home ever since. We’ve so far broken down in Fargo, North Dakota (air suspension leak) and Brookings, South Dakota (ignition failure), but are now back on the road headed for California. We met Rick, the tow truck driver who used to be a rodeo bull rider, and Wayne Westerberg, the RV mechanic who gave up his Friday night to get us back on the road. Try Googling Wayne’s name for a surreal component to this adventure, which I’m sure is far from being over.

Back to data security. That DefCon column was about the simple days of hacking and cracking 20 years ago -- a time when the only person really making money from data security on the consumer side was probably John McAfee. So much has changed since then. Today billions are lost and stolen through thefts of both data and financial instruments. Data theft is being viewed as a military problem and the term cyber warfare is rampant (more about that in part three of this series, which I’ll write during our next breakdown). What we know for sure is that we can’t go home again: vulnerability will be part of the game as long as we as a culture choose to interact and do business online.

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This week we have the DefCon 20 and Black Hat computer security conferences in Las Vegas -- reasons enough for me to do 2-3 columns about computer security. These columns will be heading in a direction I don’t think you expect, but first please indulge my look back at the origin of these two conferences, which were started by the same guy, Jeff Moss, known 20 years ago as The Dark Tangent. Computer criminals and vigilantes today topple companies and governments, but 20 years ago it was just kids, or seemed to be. I should know, because I was there -- the only reporter to attend Def Con 1.

In those days there were no independent computer security research organizations. There were hackers, or more appropriately crackers, as they were known.

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