Category Archives: tech history

Perfecting the Dreaded Software Company Acquisition

Microsoft, Google (Tracking Google’s Acquisitions), IBM and many others software company acquirers have colluded an empirical law that sets the fate of acquirees: their ex-post discount rate runs very high, at 80%.

Leaving out all-talent and all-users acquisitions, we hit upon the dreaded code rewrite, which is always a disaster waiting to happen: since developers, always running away from legacy code and its technical debt in the search of the promised land of unbuggy software, throw themselves into the abyss of the unknown taking advantage of the recently shaken power structure.

Fortunately, a well-conceived Memorandum of Understanding benefitting from the accumulated wisdom of corporate and software archeology should solve this issue including the following rules:

1. New functionality should be written using the new tools, languages and software platforms of the acquirer (under the assumption that these new tools will improve the scalability, availability, costs or any other metrics)
2. A new API encapsulating and exposing functionality between languages and platforms should be preferred (Façade, Front-Controller patterns)
3. Legacy code should not be rewritten, except when:
  1. The benefits, measured by the KPIs of the business, are quantifiably higher than the cost of the rewrite itself, on a module-by-module basis
  2. In case of doubt, it’s the acquirer the one having to rewrite the acquiree code, not the other way around

Diminishing Returns in Cryptography

The invention of the Diffie-Hellman key exchange, the first public asymmetric-key cryptosystem, transformed information security in 1976, allowing ciphered communications without a secure initial key exchange and becoming the basic building block that enabled ecommerce on the Internet. In this video, Whitfield Diffie talks about his protocol and all the surrounding events the lead to the paper New Directions in Cryptography, conjointly written with Martin Hellman.

Unfortunately, there has never been another breakthrough like that one, even though the field of cryptography research has grown by multiple orders of magnitude since them. It seems that imaginative ways to restrict access to information that enable latent markets in information are very hard to come by. Even so, my bets are on the almost current practical schemes to perform Secure Multi-Party Computation, Zero-Knowledge Proofs, Fully Homomorphic Cryptography and Private Information Retrieval, with direct applications to finance.

Movable Type Printing Press vs Internet

Information Technology and Economic Change: The Impact of the Printing Press

The estimates suggest early adoption of the printing press was associated with a population growth advantage of 21 percentage points 1500–1600, when mean city growth was 30 percentage points. The difference-in-differences model shows that cities that adopted the printing press in the late 1400s had no prior growth advantage, but grew at least 35 percentage points more than similar non-adopting cities from 1500 to 1600.

Exploiting distance from Mainz as an instrument for adoption, I find large and significant estimates of the relationship between the adoption of the printing press and city growth. I find a 60 percentage point growth advantage between 1500–1600.

The computer equipment manufacturing industry comprised only 0.3 percent of U.S. value added from 1960–2007, but generated 2.7 percent of economic growth and 25 percent of productivity growth.