Sep 11, 1995: Software AG and Esther Dyson

San Antonio: This city stifles me with its heat and humidity, and I think the much-vaunted downtown river-walk area is over-rated; it was a lot better 25 years ago, before it got so commercialized with sleazy plastic imitations of Venetian gondolas floating along something that looks more like a large drainage canal than a legitimate river. It reminds me of the "It's a Small World" boat ride in Disney World: there's no riverbank per se, no dirt, no grass; it's all concrete...

But no matter: I've enjoyed the past two days while being holed up in the air-conditioned comfort of a complex of Marriott hotels and the San Antonio convention center, where I participated in the annual Software AG) (SAG) user conference. I was here to give a one-day seminar and a keynote presentation on the new OO analysis/design methodology that I've been helping SAG develop over the last couple of years. (The Mainstream Objects book describing this methodology is listed on my Web page of Ed's books).

Among the highlights of the conference was a fascinating opening-night keynote presentation by Apollo 13 astronaut Jim Lovell. In addition, several folks from the SAG management team put on some interesting presentations, and SAG introduced some interesting new products like LIGHTSTORM, a rapid application development tool. The president of the U.S. SAG operation, Mike King, gave a presentation in which he suggested that over the next few years, IT departments will evolve to the point where they focus on three different kinds of systems:

But by far the most thought-provoking part of the conference for me was Esther Dyson's presentation on "intellectual value." It was a variation on her July 1995 Wired magazine article that I've listed on my "cool papers" page. If you get a chance to hear Esther present this in person at one of the many conferences she attends, don't miss it; otherwise, go find it in Wired magazine. I scribbled a bunch of notes on the back of an envelope during the presentation; here's a brief summary of her thesis on intellectual value:

During the question-answer session, someone asked if the Internet represents a threat to Microsoft. Esther replied that Microsoft has become somewhat like a government and is able to take advantage of the standardization represented by the ubiquitous presence of Intel boxes and Windows operating systems: it essentially imposes a tax on hardware manufacturers to cover the pre-loading of Windows into every new machine, whether they want to or not.

But the Internet doesn't value this notion of standardization in the same way; contrariwise, diversity is valued on the Internet. So this does indeed represent a challenge to Microsoft, which until recently might have thought it could "own" (or at least dominate) the Internet. But if Microsoft adapts to the Internet culture, it could help prevent the ossification that comes with large monopolies, and it could stay lean and agile and aggressive.

What does all of this mean? Well, it suggests that there is a new and different economic model for consultants, authors, analysts, information-providers, and "knowledge-workers" who have enjoyed a fairly comfortable income over the past 20-30 years by jealously guarding the actual information content that they create; the profit has often been derived by making physical copies of the information (in the form of atoms, rather than bits, to use Nicholas Negroponte's metaphor) and earning fees or royalties on each copy distributed to a consumer.

In Esther's economic model, information-providers and knowledge-workers will devote a considerable amount of time and effort creating information which they consciously and deliberately distribute for free. A case in point: the modest, but slowly-expanding, set of Web pages that I've created has taken a considerable amount of time and effort on my part, and so far, nobody has paid (or even offered to pay) a penny for it. So either it's a silly and time-wasting hobby, or I'm making a voluntary contribution of my knowledge for the advancement of the human race :-) or I'm so egotistical that I think the human race really wants to know what I think about San Antonio ... or I've already instinctively concluded that Esther's model is correct, and that the eventual "intellectual value" of my work will occur in a deferred, indirect form.

I sure do hope Esther is right.

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Copyright © 1995 by Edward Yourdon, updated July 16, 1996. Comments to Ed Yourdon,