Feb. 13, 2003 | To contemplate war is to think about the most horrible of human experiences. On this February day, as this nation stands at the brink of battle, every American on some level must be contemplating the horrors of war.

Yet, this Chamber is, for the most part, silent -- ominously, dreadfully silent. There is no debate, no discussion, no attempt to lay out for the nation the pros and cons of this particular war. There is nothing.

We stand passively mute in the United States Senate, paralyzed by our own uncertainty, seemingly stunned by the sheer turmoil of events. Only on the editorial pages of our newspapers is there much substantive discussion of the prudence or imprudence of engaging in this particular war.

And this is no small conflagration we contemplate. This is no simple attempt to defang a villain. No. This coming battle, if it materializes, represents a turning point in U.S. foreign policy and possibly a turning point in the recent history of the world.

This nation is about to embark upon the first test of a revolutionary doctrine applied in an extraordinary way at an unfortunate time. The doctrine of preemption -- the idea that the United States or any other nation can legitimately attack a nation that is not imminently threatening but may be threatening in the future -- is a radical new twist on the traditional idea of self-defense. It appears to be in contravention of international law and the U.N. Charter. And it is being tested at a time of worldwide terrorism, making many countries around the globe wonder if they will soon be on our -- or some other nation's -- hit list. High-level administration figures recently refused to take nuclear weapons off of the table when discussing a possible attack against Iraq. What could be more destabilizing and unwise than this type of uncertainty, particularly in a world where globalism has tied the vital economic and security interests of many nations so closely together? There are huge cracks emerging in our time-honored alliances, and U.S. intentions are suddenly subject to damaging worldwide speculation. Anti-Americanism based on mistrust, misinformation, suspicion, and alarming rhetoric from U.S. leaders is fracturing the once solid alliance against global terrorism which existed after Sept. 11.

Here at home, people are warned of imminent terrorist attacks with little guidance as to when or where such attacks might occur. Family members are being called to active military duty, with no idea of the duration of their stay or what horrors they may face. Communities are being left with less than adequate police and fire protection. Other essential services are also short-staffed. The mood of the nation is grim. The economy is stumbling. Fuel prices are rising and may soon spike higher. This administration, now in power for a little over two years, must be judged on its record. I believe that that record is dismal.

In that scant two years, this administration has squandered a large projected surplus of some $5.6 trillion over the next decade and taken us to projected deficits as far as the eye can see. This administration's domestic policy has put many of our states in dire financial condition, underfunding scores of essential programs for our people. This administration has fostered policies which have slowed economic growth. This administration has ignored urgent matters such as the crisis in healthcare for our elderly. This administration has been slow to provide adequate funding for homeland security. This administration has been reluctant to better protect our long and porous borders.

In foreign policy, this administration has failed to find Osama bin Laden. In fact, just yesterday we heard from him again marshaling his forces and urging them to kill. This administration has split traditional alliances, possibly crippling, for all time, international order-keeping entities like the United Nations and NATO. This administration has called into question the traditional worldwide perception of the United States as well-intentioned peacekeeper. This administration has turned the patient art of diplomacy into threats, labeling, and name calling of the sort that reflects quite poorly on the intelligence and sensitivity of our leaders, and which will have consequences for years to come.

Calling heads of state pygmies, labeling whole countries as evil, denigrating powerful European allies as irrelevant -- these types of crude insensitivities can do our great nation no good. We may have massive military might, but we cannot fight a global war on terrorism alone. We need the cooperation and friendship of our time-honored allies as well as the newer-found friends whom we can attract with our wealth. Our awesome military machine will do us little good if we suffer another devastating attack on our homeland which severely damages our economy. Our military manpower is already stretched thin and we will need the augmenting support of those nations who can supply troop strength, not just sign letters cheering us on.

The war in Afghanistan has cost us $37 billion so far, yet there is evidence that terrorism may already be starting to regain its hold in that region. We have not found bin Laden, and unless we secure the peace in Afghanistan, the dark dens of terrorism may yet again flourish in that remote and devastated land.

Pakistan as well is at risk of destabilizing forces. This administration has not finished the first war against terrorism and yet it is eager to embark on another conflict with perils much greater than those in Afghanistan. Is our attention span that short? Have we not learned that after winning the war one must always secure the peace?

And yet we hear little about the aftermath of war in Iraq. In the absence of plans, speculation abroad is rife. Will we seize Iraq's oil fields, becoming an occupying power which controls the price and supply of that nation's oil for the foreseeable future? To whom do we propose to hand the reigns of power after Saddam Hussein?

Will our war inflame the Muslim world resulting in devastating attacks on Israel? Will Israel retaliate with its own nuclear arsenal? Will the Jordanian and Saudi Arabian governments be toppled by radicals, bolstered by Iran which has much closer ties to terrorism than Iraq?

Could a disruption of the world's oil supply lead to a worldwide recession? Has our senselessly bellicose language and our callous disregard of the interests and opinions of other nations increased the global race to join the nuclear club and made proliferation an even more lucrative practice for nations which need the income?

In only the space of two short years this reckless and arrogant administration has initiated policies which may reap disastrous consequences for years.

One can understand the anger and shock of any president after the savage attacks of Sept. 11. One can appreciate the frustration of having only a shadow to chase and an amorphous, fleeting enemy on which it is nearly impossible to exact retribution.

But to turn one's frustration and anger into the kind of extremely destabilizing and dangerous foreign policy debacle that the world is currently witnessing is inexcusable from any administration charged with the awesome power and responsibility of guiding the destiny of the greatest superpower on the planet. Frankly many of the pronouncements made by this administration are outrageous. There is no other word.

Yet this chamber is hauntingly silent. On what is possibly the eve of horrific infliction of death and destruction on the population of the nation of Iraq -- a population, I might add, of which over 50 percent is under age 15 -- this chamber is silent. On what is possibly only days before we send thousands of our own citizens to face unimagined horrors of chemical and biological warfare -- this chamber is silent. On the eve of what could possibly be a vicious terrorist attack in retaliation for our attack on Iraq, it is business as usual in the United States Senate.

We are truly "sleepwalking through history." In my heart of hearts I pray that this great nation and its good and trusting citizens are not in for a rudest of awakenings.

To engage in war is always to pick a wild card. And war must always be a last resort, not a first choice. I truly must question the judgment of any president who can say that a massive unprovoked military attack on a nation which is over 50 percent children is "in the highest moral traditions of our country." This war is not necessary at this time. Pressure appears to be having a good result in Iraq. Our mistake was to put ourselves in a corner so quickly. Our challenge is to now find a graceful way out of a box of our own making. Perhaps there is still a way if we allow more time.

CNET News.com Front Door | Perspectives | Search | One Week View http://www.news.com

Perspective: Software in a box
By J. William Gurley
February 11, 2003, 4:00 AM PT
http://news.com.com/2010-1071-984072.html


"You can't always get what you want.
But if you try sometimes, you just might find, you get what you need."
--Rolling Stones, "You Can't Always Get What You Want"

Most executives in Silicon Valley take it for granted that selling software is a better business model than selling hardware.

In their mind, this goes without saying. The self-evident reasons relate to software's remarkably high gross margins. With near-zero variable costs, software businesses offer the ultimate in scalability. Software businesses are simultaneously less-capital-intensive than hardware. This combination of low capital intensity and high gross margins, also leads to better valuations in the marketplace. What's not to like?

Despite these seemingly irrefutable advantages, many start-ups are "choosing" to sell hardware instead of software. "All things being equal," software may indeed be the better model, but therein lies the issue.

There is an old joke where a man is crawling beneath a streetlight looking for his lost keys. Despite that, he readily admits he lost them at a location further away in the dark. When asked why he's searching in that area, he naively replies, "The light's better." While the "light" may be better with a software business model, these models are becoming difficult to execute--particularly for a start-up. With tactical execution and business models highly interdependent, having the "better" business model but an inability to succeed is a futile exercise.
There is a silver lining
The industry has changed in ways that improve the "business model" elements of selling hardware. The key driver is the standardization and general availability of hardware components, particularly those used in generic Intel-based 1U servers. As a result, the hardware is not a proprietary design, but rather a type of packaging. (Think of it as an alternative to a cardboard box.) Combine this availability with the proliferation of Ethernet, TCP/IP, and license-free operating systems such as Linux and BSD, and this allows a company whose primary competitive advantage is software to deliver that software in a box--a hardware box.

One might ask why a company would choose a hardware model in such a scenario when 1U servers are available from many reputable vendors. The generally accepted practice of delivering software designed for open platforms to be installed by the customer may be up for review. When you examine the details of what it takes to sell, provision, manage and rely on a piece of software, the customer increasingly prefers closed-end hardware to open-platform software. On top of this, for a start-up, this "software in a box" path is actually more cost-effective and easier to execute.

Consider these issues:

• Development complexity and quality assurance: One might assume it is easier for a start-up to attempt an "all software" development plan rather than one that includes hardware. However, when implementing on an open platform, the developer is responsible for ensuring that the code will work properly in every scenario. When you consider the number of hardware vendors, operating system flavors (and versions), peripheral vendors, peripheral driver versions, and so on, you end up with a near-infinite test plan. Choosing a single and static hardware platform dramatically reduces the risk and the costs of software development.

• Performance: Any software vendor concerned with performance will intrinsically favor a single hardware implementation, as opposed to running on multiple and potentially unknown configurations. With fewer degrees of freedom, it is possible for the developer to tune the performance of the hardware and the systems software (OS plus drivers) to the task at hand. In addition, the designer can eliminate code or features that are designed to support tasks that are unnecessary in this implementation, freeing more resources for the specific function. This can also help reduce cost.

• Security: One of the hottest issues for CIOs today is security, and here again the hardware delivery mechanism has an advantage. A closed-box design is harder to penetrate than an open-platform system. Intentionally designing the system to have limited points of entry minimizes the security holes. Lastly, the security design can be hard-coded into the system, which reduces the chances of a user or intruder removing it.

• Provisioning: When a customer receives a 1U server with a single on and off switch and a single I/O port (Ethernet jack), implementation is fairly straightforward: Plug it in and turn it on. But one huge negative result of open-platform software is that IT departments have been burdened with the tasks of installing, provisioning, tuning and troubleshooting software. More freedom leads to more ways to screw up the process. Software delivered in a closed box is inherently simpler and easier to provision.
When you examine the details of what it takes to sell, provision, manage and rely on a piece of software, the customer increasingly prefers closed-end hardware to open-platform software.

• Reliability, stability and customer service: When open-platform software fails, users can call numerous help desks--all of which will be eager to put the blame on someone else. With software sold as a single, closed server, there is only one point of contact. More important, because of the single static implementation, there are dramatically fewer issues. This is important for applications that live closer to the network layer where system interruption is unacceptable.

• Pricing: It is increasingly difficult to establish and defend baseline pricing for software. As before, this is more important if the functionality of the software is closer to the network layer than the application layer. In this space, hardware is typically purchased and software is given away to support the sale. Perhaps it is a perception issue--people are more comfortable paying for something they can touch, see and feel. This is accentuated by the fact that many software applications are available as open source in some shape or form. And while your software may be clearly better than the free alternative, free is tough to compete with.

• Distribution: One of the key reasons to consider an open-platform software approach is to potentially leverage the customer base of the hardware vendors that are already in the market. Admittedly, this worked great for Microsoft with IBM, and Veritas with Sun Microsystems. However, this is no easy task. Hardware vendors have learned from their mistakes in the past and are much less likely to sign favorable distribution deals. Hardware vendors are also unlikely to consider distributing a product until it is proven in the marketplace. Since one must first establish early traction with direct sales, there is no reason not to adopt a "software in a box" model from the beginning.

The firewall market is one in which this software-in-a-box phenomenon has begun to play out. Check Point Software pioneered this space with a software-focused, open-platform business model. Later, vendors like NetScreen began taking market share with a hardware-based delivery platform. In a June 2002 Internet Security report, analyst Bob Lam suggests that more than 50 percent of the 2001 firewall market was hardware-based. Moreover, by 2005, Lam predicts the market will be 70 percent hardware-based.

According to Lam, "Check Point appears to be at a disadvantage because of its software-based architecture, which some customers view as more difficult to install and less robust than comparable products on the market." Responding to this threat, Check Point has parted with companies like Nokia to deliver closed-box systems based on their software.

Admittedly, this theory applies much more to functional software, such as firewalls, Web servers, security devices and storage solutions, than it does to high-end applications. You shouldn't expect SAP to ship a hardware device anytime soon. Functional software applications are more task-oriented and require less customization than high-level business applications. Additionally, functional applications are much more likely to be judged on criteria such as performance, throughput, reliability and availability. All of these things favor a static hardware implementation.

Higher margins, reduced capital intensity and higher valuations are three reasons for favoring a software-delivery model. If you are passing through hardware sales, it will be impossible to mimic 90 percent software margins--but 70-plus percent margins are not out of the question. In addition, today's custom manufacturers are more than willing to assemble boxes after the order (a la Dell Computer), and ship them to the customer. This virtually eliminates inventory risk and positively impacts capital intensity. Most important, however, Wall Street appears to understand the value of this new approach. NetScreen currently trades at 6.5 times forward sales--which is more than you can say for most software companies these days.



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