Tag Archives: economics

modularity is great – if you commoditize the right complements

Google bought Android and made great things with it.

They also had an interesting audacity to announce an “open, modular” phone that ‘anyone’ could design from, and make components that would play nicely together (like IBM did with their initial ISA architecture releases back in the 80s). (Microsoft then flipped the tables on IBM and non-exclusively licensed MS-DOS to them, which meant hardware manufacturers could build entire replacement “[IBM] PC compatible” machines … that ran Microsoft software. )

But this only works if you’re Google – an advertising company that wants more eyeballs on its ads.

If you’re a phone manufacturer, like Motorola, the absolute last thing you want is for “anyone” to be able to replace all of the modules in your phone – because you’re not selling the OS, you’re selling hardware. As Joel Spolsky wrote 15 years ago,

If you can run your software anywhere, that makes hardware more of a commodity. As hardware prices go down, the market expands, driving more demand for software (and leaving customers with extra money to spend on software which can now be more expensive.)

Sun’s enthusiasm for WORA is, um, strange, because Sun is a hardware company. Making hardware a commodity is the last thing they want to do.

Motorola is a hardware company. They may want add-ons to be available to their base phone, but the certainly don’t want you replacing everything – unless it’s from them.

Jean-Louis Gassée notes these issues in his latest article, “Lazy Thinking: Modularity Always Works”,

In order to succeed, “disruptive modularity” needs a stable architecture with well-defined and documented boundaries. Module innovators need to be able to slide their creations into place without playing havoc with the rest of the edifice. This is how it worked in the Wintel PC world…sort of. In PC reality, as many of us have experienced, the sliding in and out of modules wasn’t so neat and often landed us in Device Driver purgatory. In the mid-nineties, one Microsoft director told me that the Redmond company actually spent more engineering resources on drivers than on Windows’ core software. …
Most important, strongly-worded theories are less interesting than exploring their cracks, where they don’t seem to work. This is how physics keeps moving forward and this is also how our understanding of business should advance. In the case of Project Ara, the unexamined consensual acceptance of Disruption Theory led many to believe that Modularity Always Wins meant smartphones would (and should) follow the same path as PCs.

I hope JLG (and I, and Joel Spolsky, and basic economics) are wrong.

But I doubt it.

why nations fail by daron acemoglu and james a robinson

I first came across Why Nations Fail at my local Half Price Books. After seeing it on the shelves a couple times, but still being unsure about whether I really wanted to read it or not, I reserved it at my local library.

Now I wish I had bought it (and likely will) – Daron Acemoglu & James A Robinson, while sometimes slipping into an academic, journalistic tone, present a fantastic historical, economic, cultural, and international view into the similarities, and differences, of “national” failures around the world over the last several centuries.

They spend a great deal of time expounding on the differences of countries that succeed and those that don’t – and offer insights into how failing nations could, potentially, turn themselves around.

Interestingly, the factors that play-into national success and failure are similar throughout history – critical junctures, inclusive/pluralistic political and economic environments vs extractive/exclusive political and economic structures, empowered citizenries, overbearing rulers, literacy, economic incentives (positive and negative), etc.

The Iron Law of Oligarchy:

the overthrow of a regime presiding over extractive institutions heralds the arrival of a new set of masters to exploit the same set of pernicious extractive institutions (p366)

My recommendation? Buy it. Read it. Share it. The background and conclusions this book presents and reaches should be required reading for anyone who wants to see their nation “do better” – politicians, businessmen, citizens, NGOs: all would benefit from applying what is demonstrated in this excellent work.

  • Quality of writing: 4/5
  • Quality of content: 4.5/5
  • Historicity: 5/5
  • Educational value 4.5/5
  • Overall: 4.5/5