The bubbles is dead. Long live the Bubble. With reports that AOL Time Warner Chairman Steve Case is stepping down in May, media analysts have finally received the news they've been waiting for. As with another favorite corner-turning myth -- that those who survive now will prosper when the economy comes back in '04 and '05 -- the notion that the worst is over is becoming common wisdom.
Trusting this depends on several assumptions: Innovation is dead, the economy is coming back, and the Internet bubble was mass psychosis. Let's work backward from most to least obvious. Sure, the Bubble was a gigantic mirage -- for those who failed to cash out in time. Not for Meg Whitman of eBay, or Scott McNealy and Sun, or Steve Case of AOL. Whitman got rich before, during, and after; McNealy cashed in on the dot in dot.com (where do you think he got all that cash he's always talking about?); and Case snookered Gerry Levin when Time Warner was distracted looking over its shoulder at Napster.
But no one scored bigger than Bill Gates and Microsoft. That's right -- the man who missed the Internet, according to common wisdom. What exactly did he miss, I wonder? The opportunity to provide venture capitalists (and Microsoft) with detailed blueprints of the emerging future? The chance to sit back and wait while markets were made by underfunded entrepreneurs who lacked the management chops to handle early success?
It's certainly true that Microsoft's stock price took a dive along with everyone else's as the air went out of the balloon. But what was the end result of all the house cleaning, as Redmond vice presidents jumped ship to startups and burned their Bill bridges in the process? As the smoke clears and Silicon Valley empties of jobs, Microsoft has the pick of the litter -- and all their Internet 2.0 street smarts to boot.
Assumption 2: The economy is coming back. Coming back to where? The peak of the Bubble? If not that, then from what point? Forgetting for a moment that we're still running ahead of where we were pre-Bubble, do we have anything else to show for the ride itself?
Yes. We have the Y2K buildup of messaging technology, the explosive growth of IT investment in information technology, the broadband legacy of hosted packaged applications, and the crown jewel, the Web services XML architecture. Sure, the telecom industry lies in apparent ruins. But once again, one man's poison is another's profit.
Take Microsoft's dull-as-dishwater kitchen magnet platform. Nobody at CES thought much of it except the Nokia product manager who saw Redmond's DirectBand FM subcarrier data transport as a clever end run around the carriers.
Why pay down the debt on the 3G spectrum licenses when you can toss a few Milk-Bones at ClearChannel? And when radio stations want a bigger cut, switch to Wi-Fi and bail out the satellite radio operations just before they go belly up. If Microsoft decides to license a new Stones song for an ad campaign, it should be "Time Is on My Side."
Final assumption: Innovation is dead. We've hit bottom because innovation has played itself out, the story goes. The media and IT have caught up on their next-big-thing immunizations. No, peer-to-peer is not it; users are too scared to establish peer relationships or too confused to collaborate securely across enterprise boundaries.
No, Web services are not it; they're nothing new, just a poor man's CORBA. Again, security and the hard work of transactional integrity are too hard to do. Customers want Big Brother (or Blue) to hold their hand. And no, pervasive computing is not it. Wi-Fi has no business model, cell phones and PDAs are too big or too small or too much trouble, and it's all too insecure anyway.
Who is distributing this FUD? Is it just the legitimate noise of the network, the low-level radiation coming off the aftermath of the mushroom cloud? Has innovation finally hit the wall, the corporate saturation point where no new technology can be consumed until the last round is absorbed?
Answers: Stakeholders of the pre-Bubble, partially, and no. The stakeholders have similar messages -- it's the services, stupid (IBM); it's the TV, stupid (Sony); it's the PC, stupid (Intel). The Luddite rumblings can in part be attributed to the disintermediating wave of instant messaging, file sharing, and corporate spam broadcasts. But you only have to ponder one player's methodology to see why the self-serving anti-innovation rumblings are just so much disinformation.
That player is Apple. Insulated from the storm by a loyal (and wealthy) user base, the company has gathered and nurtured a collaborative team steeped in a simple contract with its leaders. In return for secrecy, the company offers product. Not research, not frameworks, not reference implementations.
Because they're secret, they ship on time. Because they're tied to the core principles of the Internet revolution -- XML, open source, Moore's Law -- they can sit alongside their competitors without forcing rip-and-replace disruption. Because they have a small, mobile, innovation-hungry user base, they can innovate steadily and securely within the safe harbor of their tuned expectations.
Last week, I suggested that if Apple didn't exist, Bill Gates would have to invent them. The reverse is also true. Without Windows' blocking and tackling, Apple would have no holes to break through, no status quo upon which to innovate. No way to do things better, more creatively, in less time, and ultimately, at less cost.
So the next time you hear someone tell you Apple is not ready for the enterprise, ask for a second opinion. You may be hearing the sound of the Next Bubble, where Apple is snookering the rest of the crowd.