Alec Saunders SquawkBox

This really must be seen. I haven’t laughed so hard in a while.

May went by at light speed here at iotum.  It was a total blur, with trips and speaking engagements, and new business opportunities.  So, imagine my surprise when I found out a few minutes ago that iotum had been awarded a Communications Solutions magazine Product of the Year award in May, for our Pronto Conference Calling solution.  From the award text:

iotum’s Pronto Conferencing eliminates the need for special phone numbers, PIN codes or access codes to participate in a conference call. Pronto Conferencing is part of the company’s iotum platform, the world’s first presence based, contextual communications manager.

What a nice surprise!

For those seeking additional clarity on Microsoft’s view of the EU decision, here’s Microsoft legal beagle Brad Smith’s own words in an internal email to employees.  He definitely sees the EC decision as being unjustified, and unfair.  The transcript of his press conference is also worth a read.

From: Brad Smith (LCA)
Sent: July 12, 2006 1:48 PM
To: Microsoft and Subsidiaries: All FTE
Subject: Background on the EU Fines and Microsoft’s Compliance Efforts

As you’ve probably seen, the European Commission today announced that it does not believe that Microsoft has fully complied with the technical documentation requirements of its March 2004 ruling, and therefore will fine Microsoft € 280.5 million (US $357 million).

I want to provide some perspective on today’s announcement, and let you know both how hard we have worked to comply and how we plan to proceed going forward.

That Commission’s 2004 decision required Microsoft to do two things. First, it ordered us to produce and sell a stripped-down version of Windows XP in Europe that does not include Windows Media Player. We complied fully, although there has been almost no consumer demand for this version. Second, the Commission required that we license some of our Windows server communications protocols and provide what it called “complete and accurate technical specifications” to assist licensees in implementing these protocols.

In our view, the issue here is not about a lack of compliance, it’s about a lack of clarity about what the Commission’s expectations were for “complete and accurate technical specifications.” We began work on the technical documentation immediately upon receiving the Commission decision, and delivered more than 10,000 pages of documentation in December 2004. We did not receive substantive feedback until last September, nine months later. When it became clear that the Commission had different expectations over how the technical documents should be written, we repeatedly pressed for greater clarity. Then we delivered revisions promptly, offered unlimited technical assistance, and even made our source code available to competitors in an effort to resolve the impasse. In short, I truly believe the company responded quickly and in good faith to a government order that was unclear and undefined – and that we have complied with our obligations.

Despite all this effort, we’ve had a very hard time trying to get a clear statement from the Commission on how they want the technical documents to be written. This spring, we finally made a breakthrough after a group of engineers from Microsoft met with Professor Neil Barrett, the trustee appointed last fall by the Commission. A great deal of progress was made during these face-to-face meetings and an aggressive work plan was put in place to deliver revised documentation through a series of seven milestones, beginning in April and ending on July 18.

To meet the demands of the schedule, a team of more than 300 employees was assembled, including some of the company’s most senior engineers. Many of those involved played a central role in writing the protocols covered by the documentation. This team has worked around the clock to successfully meet each of the six previous milestones. Their tireless and persistent efforts and the high quality of their work is a testament to the great things people can accomplish when they pull together in a time of need.

During the last few months, we’ve been encouraged by positive feedback we’ve received from the trustee. We had hoped that this effort would demonstrate to the Commission that we would be fully in compliance by their July deadline. The fact that the Commission decided to fine us despite our massive compliance efforts is disappointing. And it’s hard to understand why the Commission is imposing this large fine when the process is finally working well and the agreed-upon finish line is still nearly two weeks away. 

So what’s next? First, we will push ahead to finish the technical documentation work later this month to meet the deadline established by the Commission. We are 100 percent committed to compliance, and we will not allow this fine to distract us from meeting our responsibilities.

Second, we will appeal this fine. We have great respect for the Commission, but we do not believe any fine – let alone a fine of this magnitude – is warranted given the lack of clarity in the Commission’s original decision and our diligent, good-faith efforts to comply over the past two years.

Third, we will maintain our commitment to Europe. We will not allow this fine to affect our important relationship with the European Commission. We will continue to partner with the Commission on important issues like education, innovation, and economic development in Europe.

Finally, we will continue to move forward with our plans for breakthrough products and services. A lot of people are wondering what this fine means for Windows Vista and other future products.  The answer is that we have worked hard to ensure that Windows Vista is consistent with the requirements of European law. We began sharing early versions of Windows Vista code with the Commission more than a year ago, and we are working to ensure that any questions they have about Vista get answered and any concerns are addressed.

In closing, I want to convey my admiration and my thanks to the engineering and documentation teams that have worked so hard throughout this entire process to meet the Commission’s demands and the trustee’s schedule. I know that you have sacrificed weekends and holidays, and worked through many long nights. Regardless of the Commission’s decision, Steve, Bill, and the entire senior leadership team at Microsoft deeply appreciates your hard work. I thank you very much.

I hope this information helps to answer any questions you may have about the European Commission’s announcement today, or Microsoft’s strong record of compliance. Despite today’s negative news, we can take pride in how hard our company has worked to live up to our responsibilities. I am hopeful that we can put this documentation issue behind us very soon.

Brad

I love meeting new people, and email is a fine way to do it.  When a friend sent out a change of address notification to his address book the other day, he accidently put the entire list on the CC line instead of the BCC line, allowing anyone who replied all to mail to the whole list again.  Some of us regarded this as a golden opportunity.  Others got bent out of shape, and began mailing the whole list asking to be removed from all future replies.  Ultimately a futile exercise, I’m afraid, as each replier hit the send button before the request arrived in their inbox.  It was quite fun as a whimsical conversation about our collective opportunities to be offered a bebo-like ransom for our companies ensued.

No harm done, except that a few self-absorbed individuals had a few extra pieces of email in their inboxes.  Chill, dudes and dudettes!

Now, it could have been worse.  During the late 1990’s at Microsoft there was a famous incident where a mailing list called BEDLAM DL3 was used in a similar way.  BEDLAM DL3 was an experimental list being used by either IS, or the Exchange team themselves.  It had over 25,000 names of Microsoft employees on it.  When one employee discovered the list, and wondered why she had been included on it, she mailed the list asking to be removed — a common error.  That set of a storm of Reply All’s saying “Me too”, followed by another storm of Reply All’s saying “Stop using Reply-All, it bogs down the email system, and so on…

In a matter of an hour, 15.5 million messages, representing 195 Gigabytes of bandwidth, passed across the network, bringing the entire email system to its knees.  Following that, the Exchange team implemented limits on the size of the reply all list.  Oh, and of course, t-shirts were made.

Hmmm… perhaps it’s time for a trip to Café Press, and get some t-shirts made…

Feel free to email or call me anytime. 

Patent infringement lawsuits seem to be coming at a fast and furious rate.  Om Malik’s latest scoop is that Limelight Networks (the content distribution network behind such notables as YouTube) is being sued by Akamai.  Akamai, of course, is the grand-daddy of content distribution networks.   

I can’t comment on the validity of the suit, obviously, but as I’ve written before, patents need to be a part of any start-up’s strategy.  Few companies can afford, or wish to pursue, an offensive patent strategy, such as the strategy being pursued by Akamai.  But that isn’t the only use for patents, and in some cases the best defense is a strong offensive capability.

If you make patent protection part of your business strategy, here are the benefits you might expect to see:

1. Increased valuation.  Being able to say that your intellectual property is protected can raise the value of your company to either an acquirer or to a VC.  Large acquirers routinely value patent portfolios as part of a transaction.
2. Defensive weaponery.  Limelight is being challenged by Akamai.   Would the story be different if Limelight’s portfolio included a patent that read on Akamai’s?  At that point, neither party can use the IP, and a cross license is the only route forward for both.
3. Cross licensing currency.  You may encounter a situation where you need intellectual property owned by another company.  Having currency of your own, in the form of a strong portfolio of patents, may allow you to negotiate a royalty-free license from the other company.