HP to focus on Intel-based Windows 8 tablets, skip ARM-based Windows RT tablets

Bloomberg reports that HP has decided to focus on building Intel-based Windows 8 tablets and not release an ARM-based tablet running Windows RT. HP was one of the vendors given early access to the Windows RT platform by Microsoft. As fewer manufacturers commit to Windows RT, more pressure is being put on Microsoft's Surface tablet to be successful. If Microsoft ends up being the only company with a first-tier Windows RT tablet, it will make any chance of successfully competing against Apple almost impossible.

Mobile's impact on Microsoft: HP's out, Nokia's in

Two announcements--one yesterday, one tomorrow--mark a major realignment of industry support for Microsoft, and also underline the transition from PCs to smartphones and mobile devices. Yesterday, HP announced two new WebOS-based smartphones and its new TouchPad, but perhaps the biggest bombshell was held for the very end of the presentation: HP will make WebOS run on its personal computers.

As I wrote yesterday, WebOS isn't a true replacement for Microsoft's Windows 7, and it relies extensively on a touch interface, so it's likely that WebOS support will be confined to HP's touchscreen all-in-one PCs and tablets, at least initially. However, HP's move is very bad news for Microsoft, because HP is Microsoft's largest software reseller. Microsoft won't get any smartphone or TouchPad operating system revenue from HP, and its revenues from Windows on HP's desktops and notebooks are now at risk. In addition, HP's decision to port WebOS to its PCs may increase the market credibility of Google's Chrome OS as a Windows alternative (although I still believe that Google should drop Chrome OS and put all its efforts behind Android.)

Bloomberg reports and other sources have confirmed that Nokia will announce a partnership with Microsoft to use its Windows Phone 7 operating system tomorrow. Nokia has been struggling in the smartphone market, and a blunt memo from Nokia's new CEO suggests that the company's existing smartphone operating systems, MeeGo and Symbian, won't turn things around. Windows Phone 7, which has been floundering in fourth place among smartphone operating systems, could get a big boost from Nokia, especially outside North America. Microsoft is addressing the big structural holes in Windows Phone 7--copy and paste are likely to be added in March, and multitasking will most likely be implemented before the end of the year.

HP's and Nokia's decisions make it very clear that Microsoft's future, as well as the future of information technology, is mobile. The problem for Microsoft is that it's moving from a position of strength (the desktop) to a position of weakness (mobile). However, Microsoft can't hold back the future, no matter how hard it tries.

HP's WebOS announcements: You mean there's no beef in this taco?

As I write this, HP's WebOS announcement in San Francisco just ended. The actual product announcements--the Veer and Pre3 smartphones, and the TouchPad tablet, are being well-covered by Engadget, CNET and others. However, what HP left out is at least as interesting as what it disclosed:

• HP didn't announce a single carrier relationship, domestically or internationally, for its smartphones or tablet, except for Verizon, which will sell a now-obsolete Pre model.
• Not a single reseller came out to commit to sell any of the products.
• HP didn't give any hard delivery dates or prices, so it's impossible to say how any of the products will stack up against their iOS and Android counterparts.
• The TouchPad will ship initially without 3G/4G support, and no carrier will bother with it until it has broadband support.
• There was no mention whatsoever of battery life for the TouchPad, which is a bad sign--if it had great life, HP would have talked about it.
• There will undoubtedly be more details tonight at HP's developer event in San Francisco, but most developers that haven't already committed to the WebOS platform are going to wait until prices and distribution deals are announced.

Near the end of the presentation, HP dropped a bombshell: It will port WebOS to its personal computers. This is clearly meant to "sweeten the pie" for software developers, but it doesn't mean anything until it's actually demonstrated. WebOS is designed to use a touch interface extensively, so porting it to a conventional PC is far from a "slam dunk". This announcement, however, has to have Microsoft shaking, since HP is its largest OEM customer for Windows. WebOS isn't going to be a complete substitute for Windows 7, but Microsoft has take the WebOS threat a lot more seriously than Google's Chrome OS.

In short, the bottom line from today's event is that HP's new devices might be really good, but we'll have to wait to see when we can get them and how much they'll cost.

More, much more, on the Hurd case

Bloomberg is reporting what I and a lot of other people said the day that the HP/Mark Hurd scandal erupted: The stories from all the parties involved the day that Hurd was dismissed and shortly after didn't make sense. There was supposed to be a mediation session between Hurd, his personal counsel, Jodie Fisher, her counsel and HP's external counsel investigating the case, Covington & Burling, scheduled for the Friday that Hurd was eventually dismissed. At the mediation session, HP's counsel was to see the actual evidence that Fisher had and would have had an opportunity to ask her questions. Instead, without the Board's knowledge, Hurd privately settled the case with Fisher on Thursday and canceled the mediation session.

It's important to note that sources speaking for Hurd claim that the Board encouraged him to settle the complaint before the mediation session. Nevertheless, the fact that HP's investigators never had a chance to either review the evidence or interview Fisher brings up a very important question: How could the Board rule that no sexual harassment took place if they never saw the evidence or interviewed Fisher? (The Wall Street Journal reports that the Board couldn't get the evidence it needed to determine whether or not sexual harassment took place, so they announced that no harassment occurred. Why didn't they say that they were denied the opportunity to get the evidence they needed to make a determination?)

Bloomberg reports that Fisher flew to company events via first-class air, stayed in luxury hotels, and had dinner with Hurd 15 to 20 times. Each dinner cost around $400. Hurd reported that he was having dinner with his security guard, but the guard denied it. Fisher was paid between $1,000 and $5,000 for every event she hosted (so she made somewhere between $15,000 and $100,000, assuming that she had dinner with Hurd after every event.) Her duties were to stand around at a cocktail party for 90 minutes, direct traffic around Hurd, and then have dinner with Hurd after the event. A few more questions: Couldn't HP simply have sent an internal corporate communications manager with Hurd to each event to direct traffic? In how many cities does dinner for two cost $400?

Now for the most salacious part of the new disclosures: HP's investigators found evidence on Hurd's work computer that he had viewed Fisher's R-rated, adult-themed movies. Another Hurd source said that all he had done was search for her on Google and found her videos, but in the context of everything else that happened, that's highly unlikely.

If HP's board had just come clean with the real reasons for and details behind its decision when Hurd was terminated, this "drip-drip-drip" of embarrassing and salacious disclosures never would have happened. As I said in my first posting, there's yet more s--t likely to hit the fan in this case.

Startups: Tentpoles and pollination

One of the most effective mechanisms for creating startups is a successful startup that turns into a big business. eBay is an excellent example of s startup that became successful and made a lot of people rich. Those people turned around and invested their money in their own startups and those of other entrepreneurs, which created a new generation of startups. I call these big, successful startups "tentpoles", the same term used in the movie business for a motion picture that's expected to be wildly successful and to spin off a series of sequels. In Silicon Valley, Hewlett-Packard and Fairchild Semiconductor were two of the earliest tentpoles; Apple and Intel sprung from them, and the current generation of tentpoles includes Google and eBay.

Tentpoles go through their own lifecycles, however. Early in their lives, they tend to attract engineers who are likely to go off and do their own startups. As they get bigger and more bureaucratic, however, they attract employees. Employees don't want to be entrepreneurs. They want a steady paycheck and good benefits with no risk. Employees crush the startup spirit of the tentpole with bureaucracy and hierarchy. Potential entrepreneurs who do join tentpoles by the time they reach this stage either leave quickly or get trampled down in the organization. As the Japanese say, "The nail that sticks up gets hammered down."

There's another model for startup creation, and perhaps its best exponent is Jason Fried, the co-founder of 37signals, the Chicago-based company that offers Basecamp, Backpack, Campfire, Highrise and other web applications, and that developed Ruby on Rails. Fried and Ruby on Rails developer David Heinemeier Hansson recently wrote Rework, a book about creating and growing small, sustainable businesses. Rework has gotten a lot of attention, and Fried often speaks about his concepts to groups of business founders and potential founders.

Companies that apply the concepts in Rework are unlikely to ever become tentpoles, and that's just fine with Fried. He believes that companies should grow organically from their own cash flow, and shouldn't depend on venture capital. Companies following the Rework model are likely to look a lot like 37signals itself--small (almost always under 100 employees), virtually organized (utilizing team members wherever they're located), very efficient, extremely flexible and a little bit opportunistic.

I call this model "pollination", where a set of concepts, or even a single idea or meme, can pollinate startups around the world. It doesn't depend on a tentpole, local universities or an active venture capital community; all it needs are motivated people who want to start their own businesses. The companies that develop out of this pollination are unlikely to ever get big enough to go public and score huge paydays for pre-IPO founders and employees, so they're probably not going to spin off lots of startups themselves. But, if they're successful, they encourage others to follow in their footsteps.

The tentpole model is the way the startup environment has grown for the past 50 years, but when it costs less to start a new technology business today than ever before, and when more resources are available in more places around the world than ever before, pollination makes more sense. It doesn't depend on the existence of a local tentpole to spin off more startups, and it doesn't rely on a local concentration of resources. People have been trying to build Silicon Valleys in their regions for decades, largely without success. Perhaps the Internet and its related technologies have made it unnecessary to replicate Silicon Valley, but it also means that there's not likely to be another concentration of tentpoles in one area like Silicon Valley in the future.

It takes successful startups to build more startups

There's a number of elements that are generally accepted as essential for a city or region to have a successful startup culture:

• Good colleges and universities, preferably with strong engineering programs, in order to provide an ongoing supply of qualified young talent
• A good quality of life that encourages graduates to stay in the area rather than relocate after graduation
• Availability of venture capital

There's another element that's less-discussed, but possibly the most important of all: Local, successful startups that get big enough to spin off other startups. This is one of the reasons that Silicon Valley has been able to maintain its lead for several generations now. Shockley Semiconductor begat Fairchild Semiconductor, which begat Intel, National Semi, Signetics and others. Those companies spun off other semiconductor companies, and the chain continues today. Hewlett-Packard employees founded Apple, Tandem and many other companies, and those companies have spun off countless other startups. Yahoo and Google have each spun off many startups. eBay acquired PayPal, and now the ex-PayPal team has built a new generation of startups. Twitter (which spun off from Google) has already sprouted Square, and many other companies will bud off over time. Facebook will have the same effect.

It takes a big success to first recruit and then spin off the founders of future startups. In Chicago, where I'm located, Groupon looks like it has the potential to spin off more startups. It's too early to tell whether that will be the start of a sustainable startup culture in Chicago, but it's a big move in the right direction.

What's the right tablet operating system?

Yesterday, everyone who watched the Academy Awards in the U.S. saw the first TV commercial for the iPad. Today, Adobe and HP released a video showing Adobe Flash and Air running on HP's Windows 7-based tablet. Tablets haven't been this popular since Moses, but I have a sense that we may be going in the wrong direction.

This is turning into a "Goldilocks" situation: Scaling up the iPhone operating system for the iPad is too little, but scaling down Windows 7 for the HP Slate is too much. Both approaches have a big benefit, in that the hundreds of thousands of applications that work on the two respective operating systems will run on their respective tablets--just not well. In the case of the iPad, scaling up iPhone applications for the bigger screen will lead to some clumsy user interface compromises. As for Windows 7, it's going to be very tempting for software developers to add a flimsy tablet layer to their existing applications and call them tablet applications, again with severely compromised user interfaces.

So, what's my crazy tablet OS suggestion? A few weeks ago, I bought a Zune HD. (Let the snickering commence.) The Zune HD user interface is the basis for Windows Phone 7 Series, and it actually works very well with touch input. (The keyboard sucks, but I think that cramming an onscreen keyboard into the Zune HD took things a little too far.) The visual and kinesthetic metaphors in the Zune HD are worlds better than layering a touch interface onto Windows 7.

Microsoft's Courier concept may tie into this as well, but Courier is very heavily dependent on its two-screen design; many of its user interface metaphors wouldn't map well into a single-screen tablet. I'd be very excited to see a Zune HD-like user interface on a tablet, and I think that it would give Apple a serious run for its money.