Fail and You Last week, Eric Schmidt ran his mouth off again at the Morgan Stanley Technology Conference in San Francisco. Schmidt commented that one of the new business models in the pipe for internet businesses is giving out free or subsidized computers to users and stacking paper on the ad revenue.
He didn't actually say that this is something Google or its partners would be pursuing. He was completely noncommittal about the whole thing, because, ya know, he didn't want to be blamed if the idea turned out to be a colossal fuck-up, just as it's been every other time somebody has tried it.
Schmidt insisted that "cloud computing is one of those changes that's going to happen... whether or not companies want it to." That's a pretty lofty statement for a company that has failed to make any substantial money from cloud hosted apps. But still, let's overlook that for the time being. The idea that service providers are again going to start handing out cheapo machines to users, bringing back from the dead the business models behind PeoplePC, eMachines, and to a certain extent NetZero, is worrisome.
I'm not worried that another metric ass-ton of investor money is on its way down the toilet. No, that's just the third act act for the Silicon Valley Comedy Troupe. I'm a little worried that the zombie business models will beget more zombie business models, and you and I both know that the only way to kill a zombie is a Bruce Campbell-delivered shotgun blast to the face (or as those of us in the biz lovingly call it, exfoliation).
Twelve-gauge, double-aught exfoliation aside, I'm worried that the reanimation of dead business-model flesh shows just how out of touch with reality the leaders of the tech industry are.
I Guess That's Why You're Broke And They're So Paid
When Web 2.0 died, it took the dream of web app ubiquity with it. It's not that the idea sucks. It's every sysadmin's dream to abandon the Microsoft Office patch death march in favor of sending a user to some website to do their work. The dream died in the disconnect between normal users and the technological idealists. Yes, it would be convenient from a lot of perspectives if everyone used Google Docs instead of Microsoft Office, if only for the sake of protecting users from themselves. The problem is that users just didn't care enough. But why not?
Web apps simply aren't compelling, and people are too used to their ways of doing things. Perhaps this is why Google Chrome, the highly touted Web Operating System, quickly grew to a healthy one percent of the market and then flatlined. Perhaps it's why Zoho, the Web 2.0-darling powerhouse out of Pleasanton, California, with its monotone reimplementation of Microsoft Office as a web app, hasn't made any encroachment into Microsoft's business that can't be dismissed as floating point round-off error.
Perhaps that's why the only Web 2.0 companies still left alive are communication tools, and not apps useful outside of your lunch hour. (Incidentally, the people who run these user-rich communication tools are struggling to find a profit that's distinguishable from round-off error. Twitter, I'm looking in your direction.)