I’ve received so many e-mails about my comments on Apple Music that I thought I ought to post some further thoughts on the subject. It has been widely reported that Apple has sold over 2 million songs within the first two weeks of launch. This is a remarkable number (although more than half were sold as part of an album, likely consisting of more than 10 songs) and would seem to bode well for the project. But I guess I’m not as optimistic. Here’s why.

First of all, I would expect that everyone interested in on-line digital music would jump at the opportunity to try the service out. I probably would even though I think that 99 cents for a song is way overpriced. If you add to that the typical zealotry that comes along with being an Apple user (for now the only eligible purchasers), two million probably wasn’t that hard to hit.

Before you Mac users start flaming me, let me assure you that I’m not trying to incite a riot here. I purchased one of the first Macs that rolled off the assembly line — I’m one of the famed six month club. I purchased an Apple Newton practically the day they rolled out of the factory also. Admittedly I haven’t had a Mac for several years now, but that’s just because I’ve been paid to develop software for Windows recently. I was in the Apple store last week to touch and feel the PowerBooks because I’m going to port some of the software I’m writing to Mac OS X. Okay? So I like Macs.

Let me share with you some additional perspective on the Apple Music experiment. When something new comes out, an extra blip on the charts is usually expected and Steve Jobs has a true knack for making that happen. The real test will be whether the offering can be sustained and that’s where I’m suspicious. On top of that I have some very specific concerns as a prospective consumer.

I’m concerned that albums cost about the same as a new CD does, yet I don’t get the physical medium or the quality of a store CD. Granted, the music downloads from music sharing services don’t have the quality of a CD, but neither do they have the price. Most people are willing to accept less quality for a significantly lower price. The Apple Music store offers neither.

Along with that, I’m really concerned about persistence. This may seem like an odd issue, but it really bothers me and most people haven’t really thought about it. We’ve become very used to a set of audio and video equipment that doesn’t really conform to anything like Moore’s law. I’ve had the same video camera for several years now. I have a CD player in my car that hasn’t changed in ten years (neither has the car!). Before CDs, I played my collection of LPs on a variety of turntables. The content medium was unprotected and the player technology was constant, so my investment could be considered virtually eternal (for all intents and purposes). Even as DVD players arrived, they were all capable of playing CDs. I expect that my CD collection will last much, much longer than my MP3 collection.

Now here’s the rub. I’ve upgraded my computer several times, changed it’s name, etc. I’ve working for a few different companies and probably gone through a couple of dozen computers (or more). When you restrict the content to a device and that device goes away or becomes unusable, the content does also. The problem isn’t the number of computers you have right now; rather it’s the turnover. There is a similar problem that is being discussed right now at the Library of Congress, which is thinking of moving to digital archives. What happens with computer technology shifts? Computer technology is subject to Moore’s Law — every 18 months, the transistors double and the technology becomes that much more advanced. What happens to the bits then? The Library of Congress is going to have to establish some process to continually move the stored bits as the technology changes. Similarly, I expect that music that I purchase today should be available to me 10 years from now, regardless of the computer used to play it. That means that any restrictions on the playing device are going to be a problem.

My feeling is that the restrictions on the music files will have to go away to solve this problem Only then will I feel better about buying music on-line. Until then, I consider that the MP3s that I have do not have any longevity and the risk is mine should they disappear. Considering what I paid for them, I’m willing to accept the risk.

I appreciate all of the comments that have been sent to me on this subject and encourage further dialog. If you are one of the folks who has purchased tunes from the Apple Music service, does persistence and longevity bother you? Do you have any concerns about paying as much for an album electronically as you would if you purchased it as atoms?

I couldn’t resist posting this quote from PeopleSoft CEO Craig Conway:

Today's biggest dependency is on the Microsoft operating system, and Microsoft most understandably is determined to continue that dependency. Their response to the push toward Internet applications is .NET. This is a strategy to convince you that if you use Microsoft development tools, Microsoft operating systems, Microsoft databases, you can continue to run enterprise software on PCs. Why is this a good thing? It's a bad thing. It causes problems It's like asbestos. .NET is like learning to make asbestos.

This is by far one of the most entertaining quotes I’ve read about .NET.

I’m often asked for my assessment of the software industry since the crash and most people are surprised at my answer. That surprises me. My assessment of this industry, as an “insider”, has been that the industry will not recover for 5 to 7 years and will certainly not be the same as it was during the boom. It looks like I’m not the only one with that assessment.

Larry Ellison, CEO of Oracle, was quoted in a Reuter’s article saying that the industry is maturing and Silicon Valley will not be what it was before. Ellison, always an outspoken guy, has never backed down from challenging the optimists. A few years ago he was quoted as saying that there will be no new computer architectures for the next thousand years. That might have been a bit of hyperbole, but in the case of the software industry, I believe that he is right. Here is why I agree with him.

First, I think that the big savings in the enterprise have already been obtained. Companies have spent big chunks of money to get a huge increase in the efficiency of their organizations and are not willing to spend more money to get a smaller increment (at least not in this economic downturn). This is an obvious argument; I’ve heard it frequently and agree.

Second, the propensity to innovate in software has declined. The software boom was primarily centered around a couple of technologies — web technology and enterprise application integration (EAI). These technologies have matured almost to the point that there is little innovation in these areas. Companies that were value pricing are now suffering from competitive pricing pressures. The only companies that seem to be winning here are the software integration and consulting companies. Technologies such as peer to peer and wireless are slow in coming on line. Security has been around for a long time and is fairly mature, thus little innovation is occurring there either.

Third, consumers are just now catching up. What we used to have in the enterprise is now showing up in the home, only in smaller scale, commodity units. We’re seeing routers and firewalls appear in the home, but these boxes are merely cut down versions of what the industry has been selling for years to enterprises.

My best guess is that the next 5 to 7 years will not be marked by software innovation, but rather hardware innovation. I’m not sure that there will be any remarkable new hardware, per se, but rather there will be a minaturization of existing software technologies into hardware devices. We’re seen quite a bit of this now in the “appliance” industry, but I think it’s going to become even more prevalent. I recall watching Star Trek episodes where what we would consider software functions altered by making hardware changes. It won’t surprise me to see new computers with CF cards (or similar) that contain complete enterprise applications and are swapped in and out easily, both for updates and, perhaps, when they need to run. When you consider that you can easily pack a gigabyte of data onto one of these units, including read/write storage, it becomes a much more interesting future.

Today, Apple unveiled their iTunes Music Store with the tag line “Downloads Done Right”. Not much has been published about this yet, but here’s my take based on what I can see from their web site.

Frankly this service will have about zero impact on anyone currently sharing MP3 files. Here are the major problems —

1. AAC format. I don’t know about your media player, but mine plays MP3s. Furthermore the AAC format requires a rather expensive license.
2. Mac only. No Windows or Linux client available, so most computers are excluded from this.
3. License. Playable on up to three computers is probably not going to cut it for most people, but at least it’s a good start. I’m guessing that either the iPod and iTunes units have DRM built in or the AAC files are encoded so that people who post them will be caught. There’s little information posted yet, but I’ll be keeping an eye on it.
4. Price. Still a big problem. No one is going to pay 99 cents for a song. I suspect that the price limit is around 20-25 cents. Just think — at 99 cents per song, it would cost you at least 15 bucks to fill up a single CD.

I think Jobs is smarter than all of this, however. My guess is that this is just a foot in the door to begin to convince the record companies that they need to lower the prices and rethink business models around this to be successful. It wouldn’t surprise me if within a year the service becomes a monthly $20/month, all you can drink sort of thing. Jobs probably just wants to be there first.