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The News – 04/19/02

In this Issue:

Recommended Reading

I realize this is the only newsletter you’ll ever need, but if you want more in-depth detail, check out:

Stan Hustad’s The Coaching Connection

Microsoft Repurposes My Services
(The Broadband Content Wars series will continue in a future SNS)

From the I Thought I’d Never See the Day Department: Microsoft has discontinued its plans to be the central repository on the Internet for consumers’ personal information.

The My Services service, originally called Hailstorm, was intended to allow individuals to keep pertinent information such as contact and credit card information “safely” stored in Microsoft’s vast data repository where it could be easy accessible from anywhere on the Internet. Microsoft first introduced the idea in March 2001, and at that time, the technology received endorsements from a handful of corporations including American Express, Expedia, eBay, Click Commerce and Groove Networks. However, after nine months of intense effort, neither these endorsers nor any other company has been willing to commit to the program.

When Hailstorm was first announced, I thought, like many observers, “Here we go again. Microsoft will use its desktop monopoly to place itself in the center of consumer eCommerce on the Internet.” In fact I firmly believe (along with Sun CEO Scott McNealy – video) that Windows XP was merely an excuse to get everyone signed up for a Microsoft Passport, the credential that is part of the My Services service (covered in a previous SNS). I mean, what other benefits does Microsoft’s newest OS have? (Please, Microsofties, don’t write and enumerate the various tweaks and small improvements XP represents. If you want a good Windows OS, get 2000.)

“People are asking what this means for Microsoft’s consumer Web services strategy,” Microsoft spokesman Adam Sohn said in response to the New York Times article that reported the My Services strategy change. “There is no shelving, no backing off from anything.” Microsoft will instead play to its strength – selling packaged software – and try to sell the My Services technology as a platform rather than as a service they control. Other corporations will buy the platform and set up their own My Services services.

Microsoft is spinning the recently reported “shelving” decision as a response to customer feedback to accelerate features they had always planned as part of My Services. In a letter to customers, the software giant said:

[Customer] feedback revealed a number of suggestions, including:

  1. Support for multiple operators of these services from the outset.
  2. Federation out of the box: Allowing other instances to securely interoperate with each other.
  3. Enterprises wanted to run the infrastructure for their employees.
  4. Make it easy to build and add new services that exploit the underlying infrastructure.

These are all things we had always talked about as part of our plan. What we have done is shift our priorities to incorporate this feedback and ensure we are bringing the right technology to market.  When Microsoft launched the technology in March, 2001, we said Microsoft would not be the only operator of these services. In addition, we talked about a process whereby new services would be developed, and how that would work within the industry.

This response sidesteps the issue that Microsoft was clearly intending to serve as the primary repository for customer information, and now they are not. To its credit, Microsoft has adapted their strategy to fit market conditions.

Microsoft will continue the Passport service, which, according to GartnerGroup, has doubled its number of users from 7 million to 14 million between last August and February. However, Gartner analyst Avivah Litan said regarding a recent consumer survey on the service, “Most consumers are signing up because they have to and not because of a strong interest in the convenience features Passport offers.”

Gartner found that 84 percent of Passport users signed up for an account to use Microsoft sites compared with 61 percent in August, two months before the release of Windows XP. Only 2 percent of consumers surveyed said they chose Passport for the convenience of single sign-in compared with 16 percent six months earlier.

The Passport service got a tremendous boost this week with news that the US government is considering making the technology the basis of what can only be described as a national identity service. This fall, the Feds plan to begin testing Web sites that allow businesses to pay taxes and where citizens can learn about benefits and social services. They also want to be able to verify the identity of users so the sites can share private information

Privacy advocates are concerned about services like Passport. Jason Catlett, president of privacy advocacy group Junkbusters, said such services amount to a transnational identification card. Such systems produce a wealth of personal information that could be abused by governments or large companies. “With these databases, you can be targeted. People don't want to be targeted,” he said.

Junkbusters and other privacy experts have filed a complaint with the Federal Trade Commission, alleging that Passport deceives and coerces consumers into giving up personal data. Catlett said it will only get worse when such information can be tied to people's whereabouts through being embedded in cell phones and PDAs.

Microsoft takes the opposite position, saying that Passport puts people in control of their personal information, since they can decide how much to share and with whom. This may be true, but it assumes Microsoft can make the technology secure and that the maintainers of the database of personal information can be trusted. Anyway, it seems unlikely that the government will permit citizens to control what it does with their personal information.

Despite the gains of Passport on the one hand, and the spin of Microsoft on the other, the “repurposing” of My Services is a victory for market forces. We are all so used to the software monopoly rolling over the competition that the idea that companies may not want Microsoft to get in the middle of their transactions seemed a feeble defense against the Microsoft juggernaut. Just because you’re paranoid doesn’t mean they’re not out to get you!

“They ran into the reality that many companies don't want any company between them and their customers,” David Smith, vice president for Internet services at the Gartner Group said in the New York Times article.

If Microsoft plans to sell the My Services technology package to corporations perhaps now they’ll have some competition. The Liberty Alliance, the industry initiative founded by American Express, AOL Time Warner, Citigroup, General Motors, Global Crossing, Hewlett-Packard, Mastercard International, Nokia, NTT DoCoMo, RSA Security, Sony, Sun, United Airlines and others, wants to establish an open personal information standard.

What’s really at issue here is identity on the Internet. As the old saw goes, “on the Internet nobody knows you’re a dog.” Or a 50-year-old man masquerading as an underage girl. Or me. That’s the problem: Vendors need to be assured that whoever’s using my MasterCard number is really me (and it is all about me, after all!). Credit card issuers have made it easier to use credit on the Internet by indemnifying cardholders against fraud. But they’d much rather be sure it’s you in the first place.

There are other situations that need identity verification, like, who is that really who just Instant Messaged you with news about Britney Spears dying in an accident (as covered in a previous SNS)? And who forwarded that email with the virus in it?

The Liberty Alliance, being sponsored by gorillas, has moved slowly. Its intent is to create “an open, federated, single sign-on identity solution for the digital economy via any device connected to the Internet.” The key here is the idea of federated, not centralized, data. The Alliance realizes that centralizing all the information about an individual can lead to abuse. Sure the phone company knows whom I call and MasterCard knows what I buy and the electric company knows how much electricity I use. I can live with that (well, I have to).

All this information can be abused, however, if it is correlated. For example, a marketer could figure out that I just bought a large screen TV or that I’m a good credit risk because I have eight jillion credit cards. It’s none of their business, and federating – keeping all your bits of information in separate places – can help keep your particulars private.

So far, the Liberty Alliance has mostly just signed up more members, and Microsoft’s Steve Ballmer thinks it’s a joke (video). Sun recently announced the Sun One Platform for Network Identity, a new hardware and Java software bundle that allows companies to build Liberty-based security systems. The Liberty Alliance plans to release its first specification this summer. With the new power vacuum created by Microsoft's repositioning, let’s hope they move aggressively to create an open, secure identity standard.

For more perspective on this issue, check out DigitalIDWorld.

NY Times (registration required)

Briefly Noted

  • Shameless Self-Promotion Dept.: CTOMentor has just released a new wireless white paper, the first in The Wireless Future series: You Can Take It With You: Business Applications of Personal Wireless Devices. This first paper in the series is free; others that will be available for a nominal fee will include:

    • Islands Make the Net: Wireless Networking and the Evolving Mesh

    • Taking Your Business On the Road: The Car As Wireless Office

    • Standards, Standards Everywhere: A Business Guide to Wireless Standards

    • M-Commerce: Are We There Yet?

    • Wherever You Go, There You Are: Mobile Location-Based Wireless Services

    • The Wireless Last Mile: Fixed Wireless Broadband Services

    • Beyond Keyboards, Beyond Wires: Voice Activated Wireless Services

    • Information, Entertainment, and Access At Your Fingertips: Interactive Wireless Information Services

    These white papers will be released over the coming months. To be notified when a new white paper is released, send an email to or check

    You also may want to check out the article I wrote on Instant Messaging in the latest issue of the TaylorHarkins Insights to Action newsletter.
  • Wired Broadband in the Windy City: The City of Chicago picked an unfortunately popular name for its Metropolitan Area Network (MAN, oh man do we need another acronym!) effort: CivicNet. A simple Google search would have turned up the fact that British Columbia, Indianapolis, Norman, OK, and places in Russia and Australia all have CivicNets. Nevertheless, Chicago’s version is an ambitious project, seeking to aggregate the $31 million (or $25 million; sources vary) in communications spending done by the City, Chicago Public Schools, Chicago Park District, Chicago City Colleges, Chicago Housing Authority, and Chicago Transit Authority. The effort proposes to connect more than 1,600 locations with high performance networks.

    The City solicited proposals first in May 2001 and then again in January 2002. The RFP responses were expected by the end of March. So you’d think the CivicNet Web page would be updated and current with all this activity, right? Nope. The main page was apparently last updated last spring and when you register to get a user ID, you’re informed about the informational meeting being held November 13, 2000.

    The initiative is moving forward, however. Mayor Richard M. Daley addressed Comdex Chicago on the subject in early March. No word out of City Hall yet on what’s up with the RFP responses, though.

  • Wireless Broadband in the Windy City: First SoftRoad hit the dusty trail. Then Sprint declined to take new wireless broadband customers. Most Chicagoans desperate for broadband Internet access had to fall back on incumbent Baby Bell Ameritech – widely viewed as the worst of a bad lot – for DSL. Well there’s hope yet. In an article on the ePrairie portal, Sprint confirms that it is concentrating on developing a next generation broadband wireless solution, confusingly termed 2G but unrelated to the cell phone 2G technology. Sprint plans a network that will use desktop devices rather than line-of-sight rooftop dishes that often require a truck roll to install. It was the costly installation (more than $1000 per location) that doomed Sprint’s previous business model. The new point-to-multipoint network will use Sprint's already licensed fixed wireless spectrum, and resemble a cell network with 150 or so cell sites around Chicago. The service will concentrate mostly on homes and some businesses. There’s no word from Sprint on when they’ll roll the new service out to other cities.

  • AOL Dumps IE in Favor of Netscape: I’ve been waiting for this shoe to drop ever since AOL acquired Netscape in 1998 and improbably continued to offer Microsoft’s browser, even after suing them. Now they’re converting CompuServe (acquired in 1997) users over to Netscape in what could be a prelude to a conversion of AOL users. When Microsoft released Windows XP, AOL lost its favored position as preferred provider, and thus the impetus to use Internet Explorer. It remains to be seen if this move re-ignites the browser wars.

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In the unlikely event that you want more of my opinions, I’ve started a Weblog. It’s the fashionable thing for pundits to do, and I’m doing it too. A Weblog is a datestamped collection of somewhat random thoughts and ideas assembled on a Web page. If you’d like to subject the world to your thoughts, as I do, you can create your own Weblog. You need to have a Web site that allows you FTP access, and the free software from This allows you to right click on a Web page and append your pithy thoughts to your Weblog.

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In Memoriam

Gerald M. Ellsworth

March 14, 1928 - July 5, 2003

In Memoriam

Jane C. Ellsworth

July 20, 1928 - July 20, 2003