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Do Large Companies Really Innovate? - Rarely

26 August 2009  |  3173 views  |  0

Banks aren't alone in their lack of innovation. Large IT companies seem to 'borrow' a bit more than ideas from entrepreneurial innovators. I'm referring to the technological rather than marketing oriented innovations, although that seems to be an active area of copying too. The best ideas encompass both.

Microsoft use a 'product activation' feature,and in this case, a sizeable part of the process was patented by an Australian who has recently won a patent infringement suit against the giant - for US$388 million. No small amount, but probably a lot less than what Microsoft wouldn't have collected on software sales without that particular feature. Another 'feature' Microsoft seem to have borrowed form someone else is Word. Perhaps the core of their value proposition to customers. I seem to remember Visicalc (unfortunately un-patented - imagine) the forerunner of Excel, is there anything original in Microsoft products? They have however added innovations to other ideas, but it would difficult to confirm whether they were original.

Steve's blog mentions the hacker who allegedly stole 130 million credit card numbers -170 million is the actual figure, I believe, this hacker is facing further charges of stealing another 40 million card details.

I'm obviously in the 'complete rethink' camp when it comes to transaction methodology and it's currently missing, but essential component - security. It's a Model T and we need electric cars.

The defcon hackers survey mentioned on finextra might be alarming but it confirms my views. Credit card details aren't the only thing hackers are stealing. Virtually at will. The real 'pro's' weren't even there. Merchants have no chance. PCI is a Plain Crazy Idea which will have little effect.

There is no room for intelligent debate, there can be no rational sensible argument that we shouldn't be looking at a new approach to transactions, security and identity.

Keith Appleyard's reminder that DNA, blood and saliva can be easily fabricated in a lab, at least well enough to fool DNA tests. The ultimate in biometrics? May as well send a low resolution photo of your bum instead of DNA. Bumometrics in action.

In reading the interesting commentary on Steve Liles' blog the need to completely rethink the transaction/security approach (already did that) was obvious. I'm not sure of Marite's idea of a 'securipedia' type site to showcase security approaches and compare solutions. Alarm bells rang for me, a trap for the unwary, given the ease with which proprietary and even patented methods etc. can be used without payment (at the very minimum payment of $millions by the patent-holder to lawyers).

I believe Marite alluded to some patent infringement of her own methods back a way? After the innovator has done the hard work a smart corporation may just add something on or complicate the process because it is cheaper than paying you, but still does the job. Make sure you have all the 'add-on' bases covered before you add  your 'securipedia' entry.

Perhaps someone can come up with a simple elegant and easy to provide solution. If you do, be very careful how you proceed.

Microsoft has been found to have used essentially someone else's patented claims in software components they use to stop people stealing their software.

Some Australians are yet to 'feel the green' after that successful (are they ever really? - rarely) patent infringement suit.

Microsoft still collected a lot of income from that little piece of protection, yet were willing to fight to try and cheat the owner who had patented claims on the method. I expect they're still fighting, there have been appeals and of course every legal tactic available to a multi-billion dollar corporation.

Perhaps a strategy is to get an ironclad patent in some out of the way corner and just wait for one of the big boys to 'come up with the idea', and get a decent income stream - then sue 'em. If you live long enough.

One thing you can be sure of is that if someone can copy it they will, or at the very least 'reinvent' it.

There's money in patent infringement. While not all infringement is pre-meditated, any large corporation which does so really has little excuse, as they have the resources and the responsibility to ensure that they don't.

Some large corporations have even created marketplaces for ideas, or more precisely intellectual property, such as one started with funding from Procter & Gamble, Siemens, Bayer, Honeywell, Dupont, Caterpillar, and NTT Leasing. Curiously Microsoft is a client, their suer is not.

My guess is that we'll see some breakthrough provided by a large financial corporation (probably quasi-government) which will eventually be shown to be the work of a small innovator and perhaps their only participation in the profit stream will likely be through the courts. I'd imagine that to be the carefully determined strategy of most companies. I could find not a single case where patent infringement actually caused a large corporation to make a loss on the venture.

I hope that the Microsoft suit and amount stands, because its time to send a message to corporations that it isn't o.k. to just go ahead and infringe.

So the question as to whether large companies innovate it probably moot. Some market leaders seem to be doing little more than 'adopting' and occasionally buying, rather than innovating. There are pitfalls for everyone.

Copying something which doesn't work well and that your customers whole-heartedly dislike is one of them. Buying it may be worse.

If ever there was a problem worth sharing - the identity and transaction security problem would be it. There is certainly opportunity for economy of scale and everyone will probably end up sharing in (and defending) any or all solutions.

It would be an oportune time for the financial industry to 'save the world' in a more relevant way than going green and what better way to improve the industry's image?

Alternatively we might see some real disruption with the main 'services' provided by banks - or at least their delivery methods - becoming obsolete overnight. Something to contemplate in this logarithmically faster wireless social-networked world. Community lending is making inroads faster than any new conventional competitor and we haven't seen their best hand yet.


Update: Microsoft has found another Judge who has overturned the jury and the other judge's verdict and vacated the award to The Aussie suing Microsoft. The Aussie is applealing to the US Court's next level.  Unusual as usual.

The story goes on the plot thickens and due to Britains tricky libel laws I will merely try and describe it as I understand it - the alleged and found to be and then found not to be infringer continues...while the patentee waits patiently.


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