Microsoft’s Naked PC problem

This is a piece that I wrote with Gerry Shih in Beijing about Microsoft’s challenges in emerging markets beyond the recent raids.

‘Naked PCs’ lay bare Microsoft’s emerging markets problem

BY JEREMY WAGSTAFF AND GERRY SHIH

Sun Aug 10, 2014 9:42pm EDT

(Reuters) – On a trip to Beijing a decade ago, Bill Gates was asked by a senior government official how much money Microsoft Corp made in China. The official asked the interpreter to double check Gates’ reply as he couldn’t believe the figure was so low.

It’s a problem that hasn’t gone away. Indeed, Microsoft’s current issues in China conceal a deeper problem for the U.S. software giant – despite the popularity of its Windows operating system and Office suite, few people in emerging markets are willing to pay for legitimate copies.

This not only costs Microsoft in lost revenue, but is also holding back the spread of its newest Windows 8 version – analysts say even buyers of pirate software prefer older versions. According to StatCounter, a website that tracks what software is loaded on Internet-connected computers, more than 90 percent of PCs in China – now the world’s biggest market – are running pre-8 versions of Windows.

Microsoft is trying to tackle this. This year it’s offering Windows 8 at a discount to PC manufacturers who install its Bing search engine as the default. And it’s giving away versions of Windows 8 for phones and some tablets.

But, as the industry shifts from desktop to mobile, the cloud and free or cheap software, China sums up both the old and new challenges Microsoft faces in making money in emerging markets – and, increasingly, in developed ones.

“The great danger for the company is that what has happened to them in emerging markets – basically no revenue from new PCs because of piracy – is not far off what’s happening everywhere,” said Ben Thompson, the Taiwan-based author of stratechery.com, a popular technology blog.

CORE COST

For sure, China is a major, and unique, headache for Microsoft. Many of the problems are tied to a broader push by the Chinese government to limit foreign firms’ dominance and encourage local technology firms to become viable competitors.

After years of healthy relations with Beijing, Microsoft last month was suddenly targeted by anti-monopoly regulators who raided its China offices as part of a price-fixing investigation.

But the spats mask the fact that Microsoft has never really cracked how to get people in emerging markets to pay for its software. The company rarely breaks out revenues by geography, but it has provided clues about the size of the problem.

In 2011, then CEO Steve Ballmer reportedly told employees that, because of piracy, Microsoft earned less revenue in China than in the Netherlands – with 1 percent of its population – even though China bought as many computers as the United States.

According to the BSA anti-piracy lobby group that Microsoft co-founded, emerging markets account for 56 percent of all PCs in use, and 73 percent of software piracy. Of the $77.8 billion revenue Microsoft generated in its 2013 financial year, China, Brazil and Russia each “exceeded” $1 billion, according to a Microsoft presentation. For comparison, Apple Inc generated $27 billion in Greater China, which includes Hong Kong and Taiwan, in its 2013 financial year.

For Microsoft, that’s a lot of lost revenue from the heart of its business. “Windows and Office are still very much the core of Microsoft,” says Sameer Singh, an India-based analyst.

The most recent breakdown by Microsoft of its results by product line – for the first quarter of fiscal 2014 – shows that 56 percent of its global revenue and 78 percent of operating profit came from Windows and Office.

Microsoft doesn’t just lose the revenue from pirate copies, it also loses access to customers who might buy other Microsoft products that work with or on top of Windows and Office.

Across most markets, Windows and Office account for more than half of revenues, says Andrew Pickup, Microsoft’s Asia PR chief. This, analysts say, is because many of Microsoft’s other products, such as Exchange and Windows servers, depend on customers already using Windows and Office.

“The Microsoft ecosystem is obviously pretty interconnected,” says Jan Dawson of U.S.-based Jackdaw Research. “So it makes sense that the proportion of revenue would be similar in emerging markets.”

NAKED PCS

Part of the intractability of piracy in emerging markets is that each part of the chain poses a problem.

For PC makers working on wafer-thin margins the operating system is one of the costliest parts of the machine, while mom-and-pop shops which form the bulk of retailers in such markets can’t afford to turn away price-sensitive customers who are comfortable buying pirate software.

The problem, therefore, starts with computer makers, Singh says, since “convincing them to ship every PC with Windows pre-installed is difficult.” Margins on PCs for a company like Lenovo Group Ltd are “near single digits,” says Bryan Wang, an analyst at Gartner.

The result is that up to 60 percent of PCs shipped in the emerging markets of Asia, says IDC research manager Handoko Andi, have no Windows operating system pre-installed – so-called ‘naked PCs’, which usually instead carry some free, open source operating system like Linux. That compares with about 25 percent in the region’s developed markets like Japan and Australia.

A quick scan of Taobao, the popular Chinese e-commerce site operated by Alibaba, shows a vast selection of PCs shipped with Linux rather than Windows. Once the machines hit the retailers, it’s hard to tell where legitimate software stops and piracy begins.

On a recent morning in Zhongguancun, a teeming electronics hub in north Beijing, shopkeepers offered to bundle what they said were legitimate versions of Windows with a new laptop, either for free or the equivalent of about $30.

Microsoft began lobbying Lenovo in 2004 to stop shipping naked PCs, but the Chinese firm countered that its margins were too low, a person familiar with the negotiations said. Two years later – just days before then-President Hu Jintao visited Gates’ U.S. home – China announced a new law requiring PCs to be shipped with operating systems. That merely dented piracy rates, which fell to 79 percent in 2009 from 92 percent in 2004, according to the BSA.

Lenovo said it reached an agreement with Microsoft in June of this year to ensure that Lenovo PCs sold in China would come pre-installed with a genuine Windows operating system.

“MOBILE ALSO-RAN”

Microsoft’s new approach is to push the price of Windows low enough to make it worth a PC maker’s while. The cost of a Windows license has fallen to below $50 from as high as $150, said IDC’s Andi, taking Microsoft down to “levels where they’ve never competed before.”

Microsoft’s Pickup said it was too early to gauge take-up.

In any case, making Windows cheaper for PCs is just part of a broader response to deeper shifts in the industry. The rise of mobile, tablets, cloud-based services and free operating systems has marginalized Microsoft and challenged its business model.

While Windows is on more than 90 percent of traditional computers – according to data compiled by analyst Ben Bajarin – that figure drops to below 14 percent once mobile devices such as phones and tablets are factored in, estimates Gartner.

More than half those devices run Google’s Android mobile OS, which is effectively free to handset and tablet makers. Apple, a key player in all types of devices, gives away upgrades to its operating systems for free.

Pickup says Microsoft has listened to phone makers’ complaints and relaxed what hardware they need to install the mobile version of Windows. It has also made the operating system free on any mobile device of 9 inches or less.

Taken together, the moves are “about bringing down the cost as more and more of the populations in these emerging markets are having their first computing experience,” Pickup said.

These are significant concessions, analysts say, but Microsoft will have to learn to be a bit player, where its software and services run on other people’s operating systems.

“The biggest threat to Microsoft,” Dawson said, “is the shift from a PC-based world where Microsoft dominated to a mobile world where Microsoft is an also-ran.”

(Additional reporting by Noel Randewich in SAN FRANCISCO and Bill Rigby in SEATTLE; Editing by Ian Geoghegan)

Taxi Dating Apps?

I’ve been meeting a better class of taxi driver lately. It’s been made possible by something called GrabTaxi, which I have begun to think of as a dating app for passengers and taxi drivers.

Of course, it’s not really, that would be weird. But it kind of is.

It’s just one of many apps and services across the world seeking to make the process of booking taxis easier. At one end of the scale there’s Uber, which aspires to allow anyone to be a taxi driver, matching car and driver with passenger. At the simpler end are apps like GrabTaxi, which offer taxi drivers another way to take bookings beyond their usual dispatcher.

Prospective passenger and cabbie install the app, and the app does the rest.

There’s a lot that’s interesting about all these apps, as they contribute to making what can be a very a frustrating experience more efficient. Eventually, it’s likely they’ll change what we think of as a taxi ride: imagine a world where every car could offer taxi-like services, driven either by their own or someone who rents them. Taxi companies and the authorities which regulate them look set for a bumpy ride.

But that’s not here yet, and anyway, I’m more interested in a different kind of benefit: providing a way for passengers and taxi drivers to have more say in who they share a car-ride with.

Think about it: it’s kind of weird that we place so much stock in safety on the roads but entrust our lives with strangers — either driving or sitting in the back. In some countries it’s like playing Russian roulette.

But even in supposedly safe places like Singapore it’s a bit of a raffle. As anywhere, Singapore cabbies are a motley bunch, ranging from those you’d happily take home for tea to those you wouldn’t, er, share a car with, let alone drive it. It’s not that they’re deliberately trying to kill you, but you sometimes get the feeling they’d rather you weren’t really there. Rides can vary from stony silence to being a captive audience for angry tales of woe or pet enthusiasms.

I just spent a good half an hour in one cab listening to the cabbie’s collection of CD sermons from a charismatic preacher called Justin. It was OK until he started extolling the virtues of the birch on one’s offspring, complete with sound effects. I made my apologies and alighted.

This is where apps like GrabTaxi come in. There’s something about downloading and installing an app that seems to appeal to a classier kind of cabbie: on each occasion I’ve had need of their services, each has been a joy, if a tad eccentric.

One young man we’ll call Dave took us the airport the other day in car decorated like his bedroom, or what I imagine it to look like, obviously we didn’t get invited back. It was black, like his Iron Maiden t-shirt, complete with laced black curtains that made it feel like a cross between a heavy metal shrine and a coffin. In a nice way. Dave himself was charming.

This is the thing, you see. The great thing about first adopters of technology is that they all have something in common — in this case a taxi app. I the passenger have something to break the ice with, while they — and I’m trying not to generalise here — presumably quite enjoy their job and want to do more of it. With some taxi drivers that is not always the case: many, when they’re not actually trying to kill you, will spend a lot of the ride complaining about pretty much everything: the government, the taxi company, other drivers, life in general.

Not so early adopters. They have a more positive outlook on life. Hence this sense that the usefulness of GrabTaxi is less about finding a taxi, than finding a taxi driver who can get me from A to B and not either kill me or make me want to kill myself before we get there.

Of course, all this is incidental to apps like GrabTaxi. Their goal is to match taxi and passenger based on availability, not on compatibility. But that’s where I think they’ve missed a trick. Add a few tweaks to their app and they could allow passengers to choose cabbies based on their likely conversation topics, attitudes to issues of the day, history of comments from other passengers, whether they help with pushchairs and shopping. And vice versa: passengers, too, could get rated by cabbies.

It might encourage both parties to put on a better show.

And who knows? A few of us might get invited home for tea.

This is a longer version of a piece I’m recording for the BBC World Service. I no longer upload the podcasts here because of time constraints, but they can usually be found from time to time at the tail-end of the Business Daily podcast available here. While I’m a staff correspondent at Reuters, this is not written for Reuters.

Software as Silo

Software is a funny thing. How important is it?

Apple has just announced it’s giving most of its away for free — effectively costing it some $900 million in the short term. Samsung has just convened its first developer conference in the hope of persuading more people to write software for its devices. Microsoft, known for its Office and Windows software, has just bought a phone manufacturer — Nokia — and promises a new raft of its lacklustre Surface tablets. Google, known for the money it makes off its software, has promised more Glasses, and owns a cellphone maker, Motorola. Amazon, which sells stuff, also makes tablets and e-readers, and is rumoured to be getting into a phone.

What companies are increasingly recognising is that software is everything but not on its own. To succeed in this new world of ubiquitous devices, you need to own as much as possible of what is loosely referred to as the ecosystem. That means hardware, software, and the services that make both hardware and software come to life.
Think a phone where you can take videos, edit them into a short movie at literally the push of a button, and then share them with friends with another push. Or a tablet that lets you and control see your company’s inventory or fleet of trucks in real time.

But this isn’t easy. It requires expertise in very different areas — areas that until recently were regarded as best considered separate industries. Focus on what you’re good at, the mantra used to be. Now, it’s more like: you’ve got to be good at all these things, or you’ll die. Think HTC, which makes great devices but hasn’t succeeded in building the software and services that makes those devices stand out.

Some companies can be good at all three, but it’s a fast-moving game. Think BlackBerry, which was good at both hardware, software and services for a while, with its email service, its own operating system and its keyboard-bound devices. But the world moved on, and BlackBerry didn’t move quickly enough.

So now it looks like Apple is heading the pack. But it too, is vulnerable. The world has been captivated by the phones and tablets it creates, but some detect a sense the company, without Steve Jobs, quite understanding where to go next. It’s likely to be an Apple TV, which should be interesting.

Samsung is late to the game, dangerously so. It dominates the world of phones, but has been slow to build software and services to bridge those devices to its other products — computers, TVs, fridges, etc. Only this week has it really embraced developers and tried to make it easy for them to do this. Samsung’s future hinges in being able to rid itself of its dependence on Google’s Android operating system — either by building an operating system of its own, or a suite of apps that run on top of it that make a Samsung device so much more valuable than one from LG, Sony, HTC or Huawei.

Then there’s Microsoft. By making its operating system and much of its software free, Apple has thrown down the gauntlet to its old rival. It’s not saying these products have no value: it’s saying that software is what makes hardware compelling, and so we’re effectively making the two one single product. For Microsoft, still largely a software player, that’s quite scary. No wonder the company is betting heavily on building its own hardware.

In some ways this is good for the consumer, in some ways not. On the one hand we’re already seeing the hardware basically controlling the software — automatically updating itself, optimizing itself for the user. On the other, the goal here is clear: bind the user to a single stack of hardware, software and services, increasingly isolated from each other. A Samsung phone may be a great device to control your TV with, layering little apps atop the screen, but don’t expect it to work with your LG smart TV. And don’t bother trying to use Apple’s AirDrop feature to send a file to your Samsung phone.

The bottom line is that these companies are being hugely innovative, moving the puck at impressive speed. But in their efforts to escape becoming commodities, they’re pushing us into silos. Nice silos, very nice silos, but silos that make me think more of the past than the future.

The rebirth of RSS?

This is a column written for the BBC World Service (here’s the show.). Views are my own, and do not represent those of my employer, Thomson Reuters. 

I’ve been wrong about a lot of things, but I’ve been particularly wrong about something called RSS. RSS is a simple standard, dreamed up during the halcyon days of the social web when there were enough interesting people writing blogs for it to become somewhat onerous to drop in, as it were, to see whether their website had been updated. In other words, there was a critical mass of bloggers to take blogging into the mainstream, but there was no easy way for the medium to scale from the point of view of readers. It was like everyone printing their own newsletter but asking interested readers to drop by their office every so often on the off-chance that a new edition had been published. 

So RSS, short for really simple syndication, was born. Essentially it wrapped up all the blog posts into a feed, a bit like a wire service, and pumped it out to anyone who wanted to subscribe. It worked brilliantly, but contained within in the seeds of its own — and, I would argue, social media’s — demise. 

The problem was this: As RSS became more popular more blogs used it. And websites. Reuters has a dozen or so; the BBC too. Soon every website was expected to have at least one RSS feed. Software called Readers became the main way to digest and manage all these feeds, and they worked well. So well  that Google got into the game, and soon dominated it. But adding feeds was still a tad awkward, but really RSS’ demise was, in my view, because of something else. 

As social media grew — I’m talking the early years here, when blogging was the preferred medium of expression, and when a certain civility held sway — it contained essential contradictions. Not everyone could be a creator, because then no one would have time to read what everyone else had written. A few kings and queens of social media emerged, and while a long thin tail remained, for the most part blogging simply grew to become like what old media was. Lots of “Talent”, lots of unrecognised talent.

In its place grew a different kind of content that could be more easily commercialised — the breadcrumbs of daily life, the links we share — which we now think of as Facebook, Twitter, Kakaotalk and WhatsApp. Content has become shorter,  and while some of those tools initially used the RSS standard to deliver it, for the most part each became a walled garden, largely fenced off from each other and driven by the value in the data that we shared, wittingly or unwittingly. 

So back to RSS. RSS is still with us, though Google is canning their service soon (eds: July 1). I am a tad upset, having predicted RSS would sweep the world. I was wrong in that, failing to take into account that content, like everything else, will tend to cater to shorter attention spans and the economics of the marketplace. But I do have hope that RSS won’t die off entirely. There are glitzy tablet apps for those who like their reading to come with big pictures and swooshy noises when you turn the digital page. A host of companies, including, ironically the once undisputed kings of the walled garden, AOL, are launching readers for Google refugees. 

I for one still need to fix some problems with my own RSS habits — the tendency to acquire new ones, the failure to read the ones I do subscribe to — but at least some people somewhere thinks there’s life in a daily diet of serious, lengthy reading without lots of eye candy. 

iPhatigue

This is the text of a BBC piece I wrote, based on our Reuters story of a week or so ago.  

The problem with smartphones is that they’re visible. We want them to be visible; we flaunt them. We put them on the table in restaurants, we fiddle with them if conversation lags; we not only need them, we need to be seen with them. 

Nothing encapsulates this ostentatiousness more than Apple’s iPhone. It has become not only the most popular smartphone on the planet, but it’s become the iconic accessory. But is it losing its lustre? 

At least in places like Singapore and Hong Kong, pockets where the iPhone was once king, I believe it is.

Driven by a combination of iPhone fatigue, a desire to be different and a plethora of competing devices, users are turning to other brands, notably those from Samsung.

According to one measure, a website gauges traffic collected across a network of 3 million websites, Apple’s share of mobile devices in Singapore fell from a peak of 72 percent in January last year to 50 percent last month, while Android devices rose from 20 percent to 43 percent.

This seems to be backed up by checking out commuters: Where a year ago iPhones swamped other devices on the subways of Hong Kong and Singapore they are now outnumbered by Samsung and HTC smartphones.

This is partly driven by iPhone’s success. For some, it is a matter of wanting to stand out from the iPhone-carrying crowd. Others find the higher-powered, bigger-screened Android devices better suited to their changing habits – watching video, writing Chinese characters – while the cost of switching devices is lower than they expected, given that most popular social and gaming apps are available for both platforms.

Of course this isn’t the end of Apple or the iPhone. The company could come out with a great iPhone 6 and I’m sure the fickle public would flock back. And Apple makes a lot more money from its devices than does Samsung, so don’t expect its CEO Tim Cook to be panhandling on your street corner any time soon. 

But there is something at play here. For one thing, Singapore and Hong Kong tend to be bellwethers of Southeast Asia, and to some extent India and parts of China — all big and important markets. 

Then there’s a longer term issue: it was usually assumed that, once converted to the iPhone, users would loyally stick with Apple. For one thing, the whole ecosystem thing — downloading apps, music, movies and syncing with other Apple devices — would lock folk in. For another, aren’t Apple users supposed to be blindly loyal to the brand? 

The apparent decline in iPhone users in Singapore and Hong Kong suggest that neither of these assumptions necessarily holds true for all those who buy Apple devices. This is hardly surprising, perhaps, given how many iPhone users there are out there.

But it might also suggest that smartphone users are much more inclined to jump from one brand to another, and from one operating system to another, than we thought. If so, that has implications,  not only for Apple, but for Samsung too, as it basks in its dominance of the Android-driven market.

Perhaps, just perhaps, all those hip Samsung users might soon decide the hip smartphone to show off is a device from a company we’d either written off, or one we haven’t even heard of.

We’re Not in the Business of Understanding our User

Za-tray2

A few years ago I wrote about sometimes your product is useful to people in ways you didn’t know—and that you’d be smart to recognise that and capitalize on itn (What Your Product Does You Might Not Know About, 2007).

One of the examples I cited was ZoneAlarm, a very popular firewall that was bought by Check Point. The point I made with their product was how useful the Windows system tray icon was in that it doubled as a network activity monitor. The logo, in short, would switch to a twin gauge when there was traffic. Really useful: it wasn’t directly related to the actual function of the firewall, but for most people that’s academic. If the firewall’s up and running and traffic is showing through it, everything must be good.

The dual-purpose icon was a confidence-boosting measure, a symbol that the purpose of the product—to keep the network safe—was actually being fulfilled.

Not any more. A message on the ZoneAlarm User Community forum indicates that as of March this year the icon will not double as a network monitor. In response to questions from users a moderator wrote:

Its not going to be fixed in fact its going to be removed from up comming [sic] ZA version 10
So this will be a non issue going forward.
ZoneAlarm is not in the buiness [sic] of showing internet activity.
Forum Moderator

So there you have it. A spellchecker-challenged moderator tells it as it is. Zone Alarm is now just another firewall, with nothing to differentiate it and nothing to offer the user who’s not sure whether everything is good in Internet-land. Somebody who didn’t understand the product and the user saved a few bucks by cutting the one feature that made a difference to the user.

Check Point hasn’t covered itself in glory, it has to be said. I reckon one can directly connect the fall in interest in their product with the purchase by Check Point of Zone Labs in December 2003 (for $200 million). Here’s what a graph of search volume looks like for zonealarm since the time of the purchase. Impressive, eh?

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Of course, this also has something to do with the introduction of Windows’ own firewall, which came out with XP SP2 in, er, 2004. So good timing for Zone Labs but not so great for Check Point.

Which is why they should have figured out that the one thing that separated Zone Alarm from other firewalls was the dual purpose icon. So yes, you are in the business of showing Internet activity. Or were.

(PS Another gripe: I tried the Pro version on trial and found that as soon as the trial was over, the firewall closed down. It didn’t revert to the free version; it just left my computer unprotected. “Your computer is unprotected,” it said. Thanks a bunch!)

The Browser Wars: Another Milestone

(This is a copy of my Loose Wire Sevice column, produced for newspapers and other print publications. Hence lack of links)

By Jeremy Wagstaff

As you know, I’m into milestones, and another one has been passed in recent days: Microsoft’s market share of browsers is down below 60%.

Now this may not sound very exciting to you, but it is. And you are to be congratulated. Because it’s you who have made it happen.

Let me explain.

A couple of years ago, when I started training journalists on things digital, I used to ask them what browser they used. They either answered Internet Explorer—Microsoft’s browser, which comes with Windows—or they would look blankly at me.

The truth is that since the demise of Netscape in the late 1990s, there really hasn’t been much of a battle between the browsers. Most Windows users accepted Internet Explorer, while Mac users settled for the Apple browser Safari.

So when I would ask the class whether they had heard of Firefox, the Open Source browser, they would again look blank, or bored, or both.

That was then and this is now, two years on.

Now most of them have heard of Firefox, and many of them have it installed on their computers.

Not only that: Most of them have tried out Google’s own browser, Chrome.

Indeed, nowadays, when I venture a peek over shoulders at cafes and in offices, I see many more Firefoxes (or Chromes) than I used to.

So it doesn’t surprise me to read that, according to research company Net Applications, Internet Explorer’s market share has, for the first time in more than a decade, fallen below 60%.

Of course, 60% still sounds like a good chunk of the market, but remember this: Internet Explorer is the default browser on Windows computers, which still occupy most of the world’s desktops. Last year that figure was nearly 68%. Two years ago, when I started the training course, the figure was 77%. Back in 2003 it was 95%.

Compare this with Firefox, which is now on nearly a quarter of the world’s computers. And while Chrome has only a small share—6.7%—it is growing at quite a clip. A year ago that figure was closer to 2%.

Some of this may be down to a ruling in Europe which has forced Microsoft to offer 12 different browsers. But more likely is that people are getting smarter—more demanding—about what is on their computers.

After all, we spend a lot more time in our browser than we used to. Most of us now use webmail, rather than a separate email application. A lot of us use tools like Google Docs, rather than Microsoft Office. And, of course, there are productivity killers like Facebook, all of which are primarily accessed through the browser.

So what makes these other browsers so appealing?

Well, Internet Explorer is considered notoriously insecure, for one. Lots of bad things are supposed to happen if you use for online banking etc. And users like their browsers fast and light. But perhaps most importantly, Firefox—and increasingly Chrome—offer a range of plug-ins (little bits of software that, well, plug in, to your browser to do extra things for you, from tell you the time in Timbuktu to letting you save clips to online databases, or to Facebook).

This, I think, is part of a broader trend that Microsoft and others haven’t figured out yet.

I see an increasing number of people using Gmail, Google’s webmail service, and I’ve noticed that all these people have customized their interface. This wouldn’t have happened even a year ago. Now they’re exploring beneath the hood of the default settings, and changing their environment to suit their moods and work styles. Some of these changes are small—background colours or themes—but they’re also more productivity-oriented, adding labels and filters to their workflow.

This is great. This is just what they should be doing. But it’s also part of a bigger trend that I believe explains the inexorable shift away from the default.

The simple truth is that as we spend more time in the browser we’re less likely to just go with what’s given to us. We want our browser to be as good as possible and because the changes we make to our online services are movable feasts: If I’ve changed the background on my Gmail to black, shifting to another browser isn’t going to reset it back to boring white.

There’s another factor at play here. Websites used to look very different depending on what browser you used. That’s changed, as developers follow standards more closely (what’s called being “standards compliant”). This gives us users a lot more flexibility—we don’t feel like we’re going to break something on our computer, or not be able to access, say, our banking website—if we’ve left the reservation and installed another browser.

The next step: the browser replaces your operating system. Google is onto it. 

Driver Phishing II, Or Who Is Trentin Lagrange?

I’m fully awake now, and doing some digging on who is behind the Driver Robot “driver phish.” The digging has introduced me to a whole level to the software scam industry.

The company that sells it is Victoria, BC, Canada-based Blitware (“or Blitware Technology Inc.,  to be precise,” as its website urges us). Nothing gives on its Who Is page, nor on the driverrobot.com website the software is hosted at. But a clue to the possibility that this isn’t just some cute little software developer is back on the LogitechDriversCenter website, which carries some named testimonials, among them this:

“I got a new graphics card but the framerate was terrible, and the manufacturer’s website didn’t help at all. It turns out that the driver that came with the card was 6 months out of date! Driver Robot got me the latest driver automatically, and now my whole system is more responsive, especially the games.”

Trentin Lagrange, CA

The good thing about a name like Trentin Lagrange is that it’s not that common. Not like the other two testimonials, which come from one Tim Whiteman and one Susan Peterson (not that they aren’t helpful. But nothing like Trentin.)

Who is Trentin?

A Google search of Trentin Lagrange indicates that either he’s a huge fan of driver update software, or that it’s not just about Logitech drivers or one small Canadian company anymore.

Trentin Lagrange, it turns out, has left glowing testimonials for driver update software, not just on the dodgy Logitech website (and a sister one at logitechdriverdownloads.com) but on websites like Realtekdriver.net, which also carries the company’s logo and calls itself “Realtek Drivers Download Center”:

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As with the Logitech website, it’s only if you scroll down to the bottom of the page and click on a link “About us”

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do you get to the truth of whether it’s a company website:

REALTEK is registered Trademarks of Realtek Semiconductor Corp.
All other trademarks are properties of their respective owners.
This website is not owned by or related to Realtek Semiconductor Corp.
We are not associated with Realtek Semiconductor Corp. in any way.
We are just running a site to help users who have trouble to getting hardware device drivers,
This web site is not associated with Realtek Semiconductor Corp. in any way.

Trentin has also left testimonials on websites that impersonate Dell-–delldriverscenter.com—complete with Dell logo

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and favicon

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And SIS at sisdrivers.org:

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and MSI at msidrivers.org

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and Intel at inteldriverscenter.com

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and Asus at asusdriverscenter.com

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and Acer at acerdriverscenter.com

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and canon at canondriverscenter.com

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as well as HP – hpdriverscenter.com

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and driverforhp.com, with this HP-looking banner atop:

image 

No denials of being associated with HP on their about page, so I’m guessing HP’s lawyers haven’t been in touch yet.

Another website, atidriverscenter.com, seems to have closed. It was active in July, when this person fell for the scam and complained on a forum.  At least some companies seem to be watching.

Well, maybe not. This website, atidrivercare.com, is still working:

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You get the picture.

Google’s Role

All of these websites appeared as sponsored ads above the search results in Google when looking for that manufacturer’s drivers (hp drivers etc) which throw up links to, for example, “official HPs [sic] Drivers & Updates”:

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(For many users these sponsored ads are either normal search results, or sponsored in the sense of vetted, so they’d be forgiven for thinking that they’re clicking on something official.)

It seems that either Trentin, Tim and Susan are just really generous with their comments and share software tips on a regular basis, or this software schmoozefest is linked to Swishsoft the company that sells Swift Optimizer, software that compresses Flash files. All three put glowing reviews on the software website, althought it seems Susan has moved from the U.S. to Australia in the meantime. Must be the taxes.

And no, I couldn’t find any reference to Trentin Lagrange apart from glowing software testimonials. Either the guy just lives to write software reviews or he is not really living.

So, we’re clear that whoever is behind DriverRobot is also behind a number of websites that basically impersonate the websites of popular hardware vendors, either within the boundaries of the law or outside the knowledge of these companies’ lawyers.

Sponsored Run

But it’s also energetically fending off accusations that it’s all a scam. Do a Google search for driver robot and you get these sponsored ads above the results:

Similarly, the ads on the side of the results:

  • DriverRobot This Is The Real Deal?
    The Truth Will Shock You! reviewblogs.info
  • “DriverRobot” Report We Bought It And Tried It.
    The Truth Will Shock You! www.todaysreview.info/DriverRobot
  • Driver Robot Exposed Buying Driver Robot?
    Get The Facts! RealityChek.net

    The top one is a straight link to the download site. The others sound like links to stories exposing the scammery, right? But they’re not: They all take you straight to driverobot.com. No reviews, or even pretence at reviews.

    Clever, huh? Outwit your detractors who accuse you of impersonating official company websites by impersonating your detractors. There’s a twist I hadn’t thought of.

    Where are the Reviewers?

    But what about those logos from respected software reviewers, like PC Magazine, Softpedia (five stars!), Geek Files ((5/5 stars, Exceptional Product!) and Chip on the LogitechDriversCenter.com website and elsewhere?

    image

    I could find no reference to Driver Robot on the PC Magazine website. On Softpedia’s website I could find no “editor’s review” but found one user review—giving it two stars out of five but saying it used “borderline means to promote its service.” GeekFiles.com contained only discussions, no reviews.

    Depressing

    All of this is faintly depressing, because all the usual checks and balances we look to on today’s web seem to have gone out of the window:

    • a website address can contain a company’s name, with no apparent action from the company itself to protect either its name or its customers;
    • Googling a product doesn’t seem to work: sponsored ads mislead with words like “official” and what look to be review sites are actually redirects owned by the product’s owner
    • Badges from third party download and software websites don’t seem to be a guide, because they are either out of date or fake.

    The fact is that many people are going to be taken in by this kind of thing. Everyone needs drivers, and everyone searches for drivers by googling the manufacturer’s name and the word driver. As many people search for hp drivers as search for kenya on Google:

    So what I want to know is:

  • What are the companies involved doing to protect their brands, their products and their customers from misleading and potentially damaging products sold in their name?

  • What are software reviews sites doing to protect their brands, and their consumers from fraudulent badges?

  • What is Google doing about sponsored ads that mislead the public? 

Driver Phishing

Maybe because it’s early in the morning, but I fell for this little scam pretty easily. I’m going to call it “driver phishing” because it has all the hallmarks of a phishing attack, although it’s probably legal.

I’m looking for the latest drivers for my Logitech webcam, so I type in Logitech QuickCam driver in Google.

An ad above the results looks promising: a website called LogitechDriversCenter.com:

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So I click on it.

It takes me to a site with a Logitech logo, lots of shareware and PC Magazine stars, Logitech product photos and three options for getting the right driver:

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DriverRobot, the first one, sounds promising. Maybe, I think, Logitech have consolidated all their driver downloads into one program. Good idea, given I’ve got quite a few of their products hanging around the computer. So I download and install it.

Looks OK so far. A window appears prompting you to start scanning your computer. Lots of green arrows and ticks to reassure you:

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Once the scan is done you’re told how many drivers you need, with another green arrowed button indicating what you should do to get them (“Get drivers”):

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(I should have been forewarned at this point. Plenty of warnings, but one key one: None of the drivers it suggested were Logitech ones. Certainly nothing to help me with my webcam.)

Click on that and you’re told you’ve got to “Register” which is “quick and easy”.

Notice there’s no other option, unless you can see the little Close Window X in the top right corner of the window:

image

Try to click on the other radio button (“Allow 11 drivers to remain out of date (not recommended). Critical updates for your computer will not be installed. Your computer may be vulnerable to crashes, performance problems, freezes and “blue screens.””) and then click Continue and the window disappears, but nothing else. It’s like those supermarkets where you can’t get out unless you buy something.

Click on the Continue button and your browser fires up with page requesting your Name and Email to register:

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Notice all the seals, locks, starts and 100% guaranteed things going on. Reassuring, eh? Except there’s no link on the page, nothing for the casual user (or a slow-witted guy who got up too early) to click on to get more information.

So the slow-witted guy enters his name and email address, thinking that’s going to get him registered. Of course not. Instead he’s asked to shell out cash–$30—for the software:

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Once again, no links to explain who is behind this, or what other options there may be.

As far as the casual user knows, this is either a Logitech product or one approved by them.

But it’s not. The software comes from a company called Blitware. The Complaints Board website has several complaints about the company and software:

The Driver Robot software does not work and the company tricks consumers in to believing that it is freeware. Am trying to get a refund of my purchase price now.

And worse: For some of those who do buy the software and follow its driver updates, it only makes things worse:

My computer completely crashed after using driver robot when it installed a generic mouse driver every time I touched my mouse I had a blue screen crash with a driver check sum error … It has also installed an elan touch tablet driver which is now in the toolbar. I dont have this device on my machine. This software is completely useless and will be going for a refund.

Others found they had no way of getting support:

Useless garbage–no contact info given. I attempted use and could see it doing nothing. What now, am I really out $39.90?

So who is Blitware? Its website says

Blitware (or Blitware Technology Inc., to be precise) is a small Canadian software vendor from Victoria, BC, Canada. Blitware’s mission is to take great software products to market and bend over backwards for our partners who help promote them.

(Notice how the company doesn’t say it’s a developer, and stresses the marketing, rather than the consumer, in its literature. That should probably tell you all you need to know, if you hadn’t gotten up too early.)

There is an encouraging link on the home page inviting you to click for Support (“Need support for a Blitware product? Our expert technical support staff is standing by to help you”) –

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– but far from take you to that helpful support staff, the link takes you to a Frequently Asked Questions page, and only at the bottom to a link for contacting technical support.

That in turn takes you to a link demanding you register at Blitware first, and then, when that is done, to a page for you to file your question.

Do that and you’re told:

We will reply to this message soon! You will receive an email when we do.

OK, so, what’s wrong with all this, and why call it phishing?

Well, phishing is the art of using social engineering tricks to lull a victim into thinking s/he is interacting with a legitimate site/product and to get him/her into coughing up passwords or cash.

Usually with banks, or emails, or accounts etc.

To me this Driver Robot is no different.

From the Google search—where a website with the word Logitech in it—everything is designed to make you think you’re dealing, if not with Logitech, then at least with a company/product that Logitech has endorsed.

The website’s title—the bit that appears in the browser’s top-most bar indicates it’s a Logitech site:

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Even the website’s favicon—the little log before the web address—is Logitech’s:

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To me this is no different to a scammer putting “Citibank” or “Paypal” somewhere in a web address to fool the user into thinking they’re dealing with someone kosher.

Anything the tricks the user, either into thinking they’re dealing with the real thing, or thinking they have no other option, is, in my view, a scam.

That the software doesn’t seem to work—it found no Logitech drivers or updates, and seems to crash computers—only makes matters worse.

I’m going to find out what Logitech make of their logos and name being used for dodgy purposes.

(more on Driver Phishing here.)

An Index Of Blogging Clients

July 2009 Update: added BlogDesk. So far I’ve not been able to find anything apart from Windows Live Writer that works with WordPress page for Windows. (Ecto’s latest release apparently does support it.) 

Blogging clients allow you to prepare posts and then upload them directly. Useful for

  • composing drafts of posts offline
  • easier editing of HTML
  • easier inserting and handling of photos
  • easier editing of existing posts

Here’s a list of the ones I know of. Any additions welcome.

  • Qumana include easy text formatting and image insertion, simple Technorati tagging, and advertising insertion with Q Ads. Make money from your blog content by inserting the ads of your choice with the built-in Q Ads tool. (free: XP/Mac)
  • ecto a feature-rich desktop blogging client for MacOSX and Windows, supporting a wide range of weblog systems, such as Blogger, Blojsom, Drupal, MovableType, Nucleus, TypePad, WordPress, and more. (free; thanks Joost)
  • w.bloggar  The tireless Marcelo Cabral who runs it constantly updates the software to work with new blogging sites. It’s free, but he welcomes donations.
  • Post2Blog handy blog editor with live spell-checking support for pro-bloggers. ($40, Windows only)
  • SharpMT good for MovableType and TypePad. Windows only; free.
  • Windows Live Writer “makes it easier to compose compelling blog posts using Windows Live Spaces or your current blog service.” Free, XP only
  • Zempt Offers a lot of useful features, including assigning more than one category to a post. Zempt is also free but would be happy to get donations. Works with all Movable Type compatible sites. (Windows, Linux, Mac.)
  • BlogJet a new version, 2.0, is out that supports YouTube and Flickr. I used to use this all the time, and plan to try this one. $40, though, is still $40. Windows only
  • BlogWizard allows you to create, edit and publish your blog entries to the server where your weBlog is located. BlogWizard works with all major weBlog services that support the Blogger xml-rpc engine. BlogWizard has an easy to use WysiWyg interface, in which you can manipulate the text anyway you want, make it bold, bigger, smaller, insert images and hyperlinks. Costs: $23
  • Blogger for Word Blogger toolbar will be added to Word allowing you to publish to your blog, save drafts and edit posts (Free; XP and Word required)
  • MacJournal lets you publish your work as a blog to any of the popular blogging services, including your .mac account. Also possible to keep your journal at your fingertips, even when you’re on the road. (Macs only; $35)
  • BlogDesk BlogdDesk BlogDesk is free, works with WordPress, MovableType, Drupal, Serendipity and ExpressionEngine.
  • MarsEdit: Mac only, but very capable, according to Mike Rohde (thanks, Mike)

Also note that Microsoft Office 2007 lets you post to a blog, and include some pretty cool features.  So does Flock. There are also some Firefox extensions:

  • Performancing Heavy duty extension with all the bells and whistles
  • Deepest Sender instead of having to go to the Update page on LiveJournal/WordPress/Blogger/whatever, or loading up a separate client program, all you have to do is hit Ctrl+, or click the button in your toolbar, and you can start posting.

Links

WordPress has a list of blogging clients here. No mention of support for pages.

Another good list here.