Web Informant #154, 12 May 1999

Shameless promotions dep't I'll be speaking at CMP's eBusiness show in a few weeks in San Jose, teaching my all-day eCommerce class on Monday, June 7th. Speaking of eCommerce, another site you might want to check out is Dylan Tweney's Report. Dylan has been one of my editors at Infoworld and a great observer of this industry. His site and newsletter are fun to read and informative.

       The announcement last week that Microsoft was buying a piece of AT&T brought a smile to my face. If you do the math on the agreement, Microsoft is paying AT&T $1000 per each copy of Windows CE to run on top of our nation's TV sets. You read that correctly.

       In my book, this is called a spiff: a vendor puts money on the table (some would call it a bribe) to convince a reluctant reseller to carry its product. This is familiar practice in the cell phone world. How do you think all those $1 phones came about? It isn't because these phones can be manufactured that cheaply. The phone makers spiff the resellers in the hopes of building market share, and keeping you as a customer on their networks.

       But the world of cell phones and the world of TV aren't very similar markets. This latest move by Microsoft is a curious and perhaps desperate attempt to bring CE into the set–top market. What is a set-top, you might ask? This is the device you have on top of your TV which is connected to your cable network and authenticates you to the network, as well as acting as a channel changer. What, you don't have a set–top box and just use your cable–ready TV channel controls? You are not alone, and here lies the first problem for CE–TV: most folks don't want another thing with wires to deal with, thank you very much.

       There are numerous set–top devices out there currently, and from the cable operators point of view, it would be nice to have a single standard to deal with in managing and deploying its networks. (Does this sound familiar to you?) So Microsoft is trying to bludgeon its way into this market, where it currently has zero share.

       Can you see where this will lead? With CE running your TV, you'll have to reboot to bring up those "protected-mode" adult channels like Playboy and Spice. And if you hit the wrong keys on your TV remote, you'll get that blue screen familiar to many windows users. Before you can scan up to channel 70 and above, you'll first have to pop the top off your set–top and add another 4 Mbyte SIMM and reboot a few times. And of course you'll have to download the latest firmware to be able to view MSNBC and other advanced TV channels.

       So here's my suggestion. Those of you that aren't happy with your CE devices, send a note to Microsoft and ask when you too get can your thousand smackers rebate. Maybe we can start a movement.