Spawned the PC Era

The consequences of these IBM decisions not only spawned the PC era, but also led to the creation of a new and highly profitable PC software segment. To help complementary hardware designers and software publishers create expansion hardware and software applications, IBM published the essential BIOS code for the PC. The BIOS remained copyrighted by IBM since they intended to use it to prevent unlicensed cloning of the IBM PC. Unfortunately for IBM the BIOS was soon reverse engineered by Compaq and others using a “clean room” process that avoided legal liability for copyright infringement. This gave low-cost makers of PC clones the last technology piece they needed to deliver inexpensive PCs. The resulting explosive growth of PC clone sales and adoption ultimately changed all aspects of computing, creating a wealth of new companies like Microsoft, Intel, Compaq, Dell, and subsequently drove acceptance of the PC architecture into more demanding server applications at the enterprise level.

Over a Billion PCs Sold

Within 25 years over a billion PCs were sold. Still the leading computing architecture, the second billionth PC was shipped sometime in 2008. How could such enormous consequences arise from a few relatively modest engineering decisions? The answer seems simple. Open architectures are vastly more efficient to extend, allowing many more individuals and companies to contribute and participate in accelerating the design, application, low-cost manufacturing and distribution of a product. IBM didn’t intend to create an open platform with the IBM PC. It just didn’t foresee that the BIOS code would be reverse engineered. In an attempt to regain control, IBM created a new proprietary system bus called the MCA and licensed it for hundreds of dollars. While this approach would prevent others from cloning new IBM PCs without a license, the MCA bus was adopted by virtually no one outside of IBM. Instead, the clone makers created their own standard ISA bus which was soon followed by an even faster EISA bus.

Peripheral Component Interface

A similarly important milestone in the history of the PC was the introduction by Intel of the Peripheral Component Interface or “PCI” standard. Intel realized they should create a standard bus and support it with low-cost Intel chips. Intel designed the PCI bus to be fast, inexpensive to build, and royalty-free.  With Intel behind it, the jockeying between IBM and the clone makers about board compatibility ended. The enormously successful PCI specification and its successors since 1992 are still the dominant local bus system within PCs and servers. Today PCI versions continue to receive wide support from all PC manufacturers globally. The PCI bus from Intel was wildly successful in simplifying integration, further driving down the PC system costs, and vastly improving PC reliability for all consumers and businesses.

John Koenig is the founder of Compute Media and designer of The Patent Studio. You can follow him on Twitter @johnkoenig.

Photo Credit: A. Disc

Starting with his own company, Levchin explained Slide’s business as “adding the meat to the bare bones of social graph.“ Levchin, one might remember, is part of the team that built and sold Paypal to eBay, which many investors felt eBay had no choice but to buy. Levchin seems to be going for a repeat, leveraging Facebook to build Slide the same way. With the humblest expression he can muster, Levchin deadpans, “I thank my generous hosts”.

The social platforms have begun to open up their APIs, giving application developers like Slide more leverage and potentially putting them in competition with the platforms. “Social software builders compete for advertising dollars ultimately” Levchin explains. He believes it’s simply a matter of who delivers the best applications for advertisers to engage with users. 

To illustrate Slide’s benefits to advertisers, “Every single campaign that we’ve run in the world of Super Poke has been nothing but a smashing success for the advertisers,” Levchin contends. This raises the question of whether the application developers will eclipse the platforms, just as Yahoo made Netscape less relevant. “Since Netscape was based on standards, it is really Internet Explorer that made Netscape irrelevant,” says Peter Yared, CEO of iWidgets. “A better analogy is Windows and Mac OS.” Yared suggests. “The more applications, the more relevant the platform — until all the apps move to another platform like the browser, which is what happened to Windows.”

When asked, Levchin dismisses any question that social applications might be fad, saying that part of Slide’s job is to make sure that doesn’t happen. He simply believes the best applications will prevail, whether they come from the social platform owner or not. “The engagement that the user has when they’re using one of our apps is close to that of television except it is fully interactive,” he explains. Levchin thus contends that Slide is in good position to serve advertisers in the new ways they are now demanding. First Levchin says he has packaged the Slide user community into various “affinity groups”. This allows Slide to deliver better campaign results but without hitting a wall of privacy issues. He says that Slide “complies with their covenant with the users” while at the same time correlating “patterns of usage” into affinity groups they can offer to the advertisers.

Levchin also says that Slide has the right stuff as “Madison Avenue becomes more concerned with engagement metrics.” Engagement must not be intrusive, since spam is the biggest complaints users have about Facebook and MySpace. As people reach attention deficit, applications like SuperPoke can become a nuisance even between friends. Levchin has some ideas about how to address the problem. “Our plan is simple and obvious and I suspect it’s a human one, to create tools or levers for the users that make it easy to control the spam.” Many aggregators like Friendfeed are also trying to solve this problem but no company yet offers an outstanding solution.

Virtual goods are also getting Levchin’s attention. “I’ve seen with my own eyes the first time in Asia for me where people make billions of dollars selling virtual goods,” he says. Whether this translates to similar opportunities in the United States is a still a matter of speculation. But it may at least be an alternative business model to the presently large focus on advertising revenue.

Lets start with cable, which still leads the U.S. in total broadband subscribers. Many cable subscribers are not happy with the performance of their broadband and say they would switch to DSL if given the choice. As a result, DSL is recently outpacing cable adoption. In the third quarter of 2007, about one million additional homes subscribed to broadband cable for a quarterly growth rate of 3.3%. Each of the major telephone carriers handily beat the cable growth rate with new DSL subscribers.

Globally, telephone companies continue to improve the use of their existing 1.3 billion copper subscriber lines. Broadband DSL subscribers worldwide outnumber broadband cable subscribers four to one. About 65 million broadband DSL lines were turned on globally in 2007. That’s more than the number of households in California, New York and Texas combined. In China, DSL remains the favorite. According to the Xinhua news agency, China has 122 million broadband users, the highest in the world. Sixty percent of them access the Internet over broadband DSL. 

Shanghai Telecom provides fixed line broadband to three million subscribers. About 85% of them access the Internet at more than 2 Mbps, considered the lower end of broadband in China. By comparison, “broadband” in the U.S. as stated by the FCC is “at least 200 kbps in one direction”, an embarrassingly dated definition that’s due for a rewrite.

The Chinese government plans to restructure six existing fixed line and mobile units into three operators with both fixed and mobile network assets. China Netcom with 114 million fixed line customers, including more than 18 milion broadband customers, will join mobile operator China Unicom with 118 million TDM customers.  China Telecommunications with 222 million fixed line customers, including 35 million broadband subscribers, will merge with China Unicom 41 million CDMA wireless subscribers. China Mobile Communications with 332 million wireless subscribers will merge with national fixed line operator China TieTong Telecommunications 20 million fixed line customers, including more than 3 million broadband subscribers. 

This suggests even more growth for DSL in China, and at higher speeds than the U.S.  China is not alone in offering better bandwidth. India also sets a higher broadband definition for carriers. Recently the Indian telecom regulator, TRAI, notified all Indian service providers not to use words like “up to” and has instructed them to unambiguously indicate the minimum speed to customers — at least 256 kbps in case of broadband subscription plans. Most US-based broadband providers still use the vague “up to” language in their contracts and marketing.  

According to a 2006 consumer research report, a third of U.S. households are still stuck with dial-up, and another third lack Internet access of any kind. More than half of DSL subscribers in the U.S. do not receive throughput of 200 kbps in both directions. Compared to China, the U.S. telephone companies are making slow progress on improving the DSL capacity of their copper lines. Patterns of Internet use in China are different than the U.S. Nearly seventy percent of Internet users in China say they use instant messaging, compared to only 26 percent in the U.S. Far more Internet users in China say they download video and music. That’s probably because China has more bandwidth and fewer lawyers, a pretty good tradeoff. In the final analysis, U.S. subscribers might just have to quit their DSL and cable, and subscribe to 3G.