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Last night I was surfing the web and came across a news story titled Ten Things Americans Waste the Most Money On from a web site called 24/7 Wall Street. I’ll save you the trouble of reading the story: we Americans waste our money (in monetary order from most to least) on restaurants, gifts, audio/video equipment, pets, hotels, entertainment admission fees, alcohol, sporting goods, tobacco, and apparel. Or in other words eating, having family and friends, enjoying music, having a dog or cat, experiencing the world, knocking back a dirty martini, exercising, and replacing our worn-out clothing is a frigging waste of money.

Just shoot me.

If we didn’t spend all that money what would happen? The way the folks at 24/7 Wall Street evidently see it, we’d be better-off because we wouldn’t be wasting so much money. Of course being such careful spenders would not only make us dull and uninteresting as Hell, it would also destroy our economy.

Great advice coming from a financial site.

So I ask you, what was the point of this story? The only point I can see is that 24/7 Wall Street writes it and, according to their web site, the story is then syndicated to TheStreet.com, AOL Finance, BloggingStocks, The Wall Street Journal Online, MarketWatch, StockHouse, MSN Money, AOL Finance, Daily Finance, Time.com (TIME.COM!!!), and Newsweek.com.

They publish it, we read it and someone makes money.

A pox on all these publications. They should be ashamed to print such garbage.

This story is less than air, it is vacuum — words stuck together and published solely to fool dopes like me into being exposed to ads. And while one might argue that it has always been so, well I don’t think it was ever quite this bad.

I don’t want to pick on 24/7 Wall Street too much, but they did write the story so here goes.

The story is crap and those who wrote it are hypocrites. For one thing they somehow excluded from their list of wasted money anything having to do with their own line of business. No publishing is mentioned other than cable TV. The Internet, newspapers, magazines (all sites in the 24/7 Wall Street syndicate), and books are never mentioned.

I certainly spend far more each year on computer equipment and Internet service than I do on audio-visual equipment, which is right up there on the 24/7 waste list. For that matter I spend more on newspapers, magazines, books, and telephone service, too, which aren’t mentioned at all.

Whether these oversights are intentional or inadvertent doesn’t really matter: the story has no substance and no value, none.  No wonder it was aggregated (but not paid for) by the Huffington Post.

We used to talk about having 100 channels but nothing to watch on TV, and now the same thing seems to be happening to Internet news. News is being search-engine-optimized to heck and back with the result that it is harder and harder to find anything worth reading on the Net that doesn’t come through a major portal.

Yet here’s a funny thing, this rag you are reading now — I, Cringely — can’t even be found in many search engines because Google won’t index me as either news or a blog. Weird, eh? Hundreds of thousands of people manage to find these words but they have to do it despite the Internet, not because of it.

You may wonder why I don’t just submit my content to Google and ask them to index me. I have, dozens of times. A few times I’ve even been indexed for a week or more, but then I always fall off. This happens today at cringely.com but it happened, too, back at PBS where I used to have the network’s legal department contact Google on a regular basis to no avail.

Clearly I have enemies, terrible luck, or what I write is simply without value.

As it is, the only way I can get in Google News is by having some other indexed site quote me.

Yet there is 24/7 Wall Street, indexed all over the web and telling us we’ll be fine as long as we don’t eat don’t have fun, and above all don’t buy anything.

You can’t miss it.

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I don’t think Leo Apotheker is going to survive long as CEO of Hewlett Packard. This is not based on any inside information, just my own pondering. And when Apotheker does go down, I’m pretty sure I know who will take his place.

The players in this drama are Apotheker, various HP executives, and the HP board, with the important bit of information being that the board has changed substantially in composition since Apotheker was appointed last year. It’s a new board.

Leo Apotheker was a dark horse candidate to run HP. He’s German, comes from an enterprise software background at SAP, the big German software company, and has no history in hardware. All previous HP CEOs have been American, most came up through the company, and all but Carly Fiorina had clear backgrounds making and selling the kind of hardware HP is known for. Fiorina, of course, came from Lucent Technologies and sold into the telco market where HP is not a player. Still she had a background selling big iron.

That the HP board chose Apotheker wasn’t such a surprise given the mood of that board, which was trying to fight against its own bad reputation for infighting and poor conduct (hiring private detectives and unethically gaining access to board member private phone records), bad hires (Fiorina), and worse hires (Mark Hurd). That board felt they needed a new CEO who was clearly different from both Fiorina and Hurd and came from a C-level job at a leading technology company.

Apotheker certainly qualified on those terms with the only downsides being his lack of hardware experience and that he’d been fired from SAP after only seven months. But heck, he was available.

And the guy might have succeeded but for two events beyond his control — the Oracle lawsuit against SAP, in which Oracle tried to call Apotheker as a witness, and former eBay CEO Meg Whitman’s loss in her run for governor of California.

SAP didn’t want Apotheker to testify in the lawsuit over SAP’s admitted theft of copyrighted Oracle materials and HP didn’t want their new CEO dragged into it either. So at just the moment when new CEO Leo should have been knocking back brewskies at HP Friday beer busts, proving to the company that he was a real engineer, Apotheker was instead on the lam to avoid being served with a subpoena, orbiting in an HP jet anywhere but Silicon Valley. This hurt Apotheker and HP and didn’t help SAP all that much, either, since that company ended-up having to pay more than $1 billion in damages to Oracle.

On the chickenshit-horseshit-bullshit spectrum, Apotheker hiding from the court was definitely chickenshit behavior that probably reflected the old HP board and hopefully not the new one.

That lawsuit is history, but the damage to HP and Apotheker lingers. Now add to that HP’s weak earnings and its warning just this week of soft earnings to come and Apotheker’s position is further compromised.

Then someone remembered the SAP employee survey just prior to Apotheker’s firing there where he was shown to be distant and unpopular. And while he’s not yet viewed broadly at HP as distant and unpopular, neither is he close and popular. He’s still an enigma to most employees. And Apotheker will get no help from the HP executives who were passed-over to hire him.

Then there’s Meg Whitman, who expected at this point to have resigned from the HP board to spend all her time running California as governor. But that didn’t happen, so now what is she to do? You can only get so many pedicures. She’ll eventually get around to hip-checking Apotheker and taking his job. Meg can knock back brewskies as well as any man and will probably fill those CEO shoes even better than Apotheker.

I know I am speaking early about this but that’s why I get the big bucks.

There is only one chance Apotheker has to save his job and that’s by buying his old company, SAP. A merger would transform HP, instantly making it a power in enterprise software, much more competitive with both Oracle and IBM, and strongly emphasize Apotheker’s strengths.  Enterprise software right now is less than five percent of HP’s total business and that has to change if Apotheker is to survive.

So Apotheker could make a bold move, transform the company in his own image, and save both his job and the day. But I don’t think it will happen because SAP is on a roll and getting more expensive by the day. At more than $60 billion, it’s probably too expensive now for HP to buy.

It might have worked had Apotheker bought SAP on his first day of work at HP but he didn’t know then what trouble he was in. Now it is probably too late. And while his end, I think, is inevitable, it should also be very entertaining because Meg Whitman will take out Leo Apotheker with some real boardroom flash and style.

Remember you read it here first.

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Next week Apple will have a product event, presumably to announce the next generation of MacBook Pro notebooks. Every year we see these upgrades. The notebooks get faster with more storage and every couple years they look a little different. This time, however, there will be another change — the addition of a new type of peripheral data port called Light Peak that promises, at 10 gigabits-per-second — to be the fastest-yet connection between a Mac and a storage device or even from one Mac to another. And this latter use is key because in addition to Light Peak-equipped MacBook Pros, I expect to see next week a Light Peak Mac Mini. Now that’s interesting.

Light Peak was Apple’s idea in the first place, promoted to Intel by Cupertino as an interface to replace FireWire 800, USB 3.0, SCSI, SATA, you name it. There are precedents for Apple proposing new connection technologies like this. That’s how both FireWire (IEEE 1394) and WiFi (802.11) came to be. Like FireWire, Light Peak uses a daisy chain topology, so most computers will only need one or two Light Peak ports. But unlike FireWire, Light Peak will come in both optical and copper versions, with the machines to be announced next week likely to have Light Peak copper, which is limited to three meters per hop.

In time the optical versions of Light Peak will offer 100 gigabit-per-second speeds over distance up to 100 meters along with a separate electrical connection in the same cable that will easily power large displays. One size fits all.

In one sense it is easy to see Light Peak as just another Apple-inspired technology intended to keep peripheral profit margins higher for a generation or two. That’s what appears to have happened with Apple’s Mini Display Port screen connector. Light Peak is also Apple’s way to leapfrog USB 3.0 for a faster, again higher-margin, platform. But there’s a lot more to Light Peak than that.

MacBook Pros will mainly use the new ports to mount external hard drives for video editing, so we can expect a drive or two to be announced next week as well. But it’s the potential Mac Mini application of Light Peak that I find so fascinating.

Remember that last year Apple stopped making xServe, its 1U server platform, seemingly abandoning the server market and causing outrage in some customers. Apple at the time made lame excuses about how it was somehow more efficient to use big Mac Pro boxes which, yes, had more processors and more cores, but still made no sense at all in a data center environment. Apple was done with the enterprise, we all figured.

Enter the Light Peak-equipped Mac Mini, hopefully next week as “one more thing.”

Remember that Mac-based supercomputer a few years ago at Virginia Tech? Apple got a lot of press from that installation first using G5-based Mac Pro boxes and then Intel-based xServes. But the installation was definitely non-trivial, as was the software.

Now imagine a supercomputer built from Light Peak-equipped Mac Minis.  You’d unpack the Minis, plug them into power, plug them into each other with one Light Peak cable each, then load your software in one of the Minis, reboot them all and go out for a frosty beverage. That’s it, thanks to Light Peak, xGrid, and Grand Central Dispatch.

Xgrid has been built into OS X for years, offering some nice loosely coupled multiprocessing capabilities that few people have taken advantage of. Grand Central dispatch is now built into OS X that allows high efficiency task scheduling not just on the local multi-core machine, but down to individual program threads between tightly coupled machines (think FiberChannel). But Light Peak makes FiberChannel look slow, is inexpensive (FiberChannel is not), and is super easy to set up. And don’t forget Apple has invested gigabucks in that huge North Carolina data center — a data center that is schedule to open very soon.

Start with a Light Peak-equipped Mac Mini. Need more horsepower? Just get another Mini and connect with Light Peak. Grand Central will automatically distribute the load across multiple devices. A 2U rack will hold eight Mac Minis that, tightly coupled, will run rings around an Xserve. Better yet, given a good high bandwidth connection, OS X will be able to access applications and data in the cloud as though it were local.

This combination of seamless local and cloud computing could open up whole new markets for Apple which you may also have noticed has started opening Business Stores.

It’s not that Apple doesn’t want enterprise business, they just want to support the enterprise market from the same simple product line, selling Mac Minis by the ton. With Light Peak, xGrid, Grand Central Dispatch and Mac Minis used as compute bricks, organizations will be able to build servers of any size, automatically backed-up from the woods of North Carolina.

Apple is out-Googling Google.

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Long before I became involved with technology I worked as a reporter in the Middle East. My work there introduced me to many important characters of that era. Some of them, like Yassar Arafat of the Palestine Liberation Organization and King Hussein of Jordan, are long gone from the scene. I effectively predated Mubarak, and in those days Bahrain was mainly known as the only place on the Gulf where drivers were polite and you could legally buy a drink. But one constant that remains is Colonel Qaddafi of Libya, though he’s not what this column is about. It’s about Major Jalloud, Qaddafi’s right-hand man.

I have no idea if Major Jalloud is still alive or not. Certainly he doesn’t come up in a Google search past the early 1990s. But that doesn’t matter because whether his name is different or not, there will always be a Major Jalloud in Qaddafi’s Libya. And that’s why we’ve seen so far 200 protesters die in that country.

I’ve always been struck by the similar styles of Qaddafi and Fidel Castro of Cuba. In fact I think Qaddafi based his public persona on Castro, they are so much alike. These men rose as revolutionaries, remember, and like to be identified with their military backgrounds. But going further, they’ve deliberately tried to maintain a common touch by Castro wearing fatigues, never a dress uniform, and Qaddafi — an absolute dictator — never taking a military rank above colonel.

Both men pretend to answer to some form of revolutionary council, to be not above the law — their law, of course. And each tries for folksy touches to connect himself with the common people. For Castro it’s baseball (he’s a pitcher, or was) and for Qaddafi it’s embracing a Bedouin heritage that’s not real for him or for his largely urban nation. He camps-out in the desert with his tent and his carpets, his air conditioning and satellite TV.

In order to maintain that folksiness while at the same time run a ruthlessly repressive regime, both men have been very successful in pushing down by one level the bad-guy role. The muscle starts somewhere just below the top, and in Libya that’s with Major Jalloud.

Thirty-five years ago when I knew him, Qaddafi was a young gun and very full of himself, but the sense I always had was that he knew it was all for show and he didn’t really take himself too seriously. I asked him one time, for example, how to spell his name. After all we’ve seen it in print with a G and a K and a Q: which did he prefer? “Spell it any way you like, ” he said (in pretty fair English, by the way — something else that seems to have strategically disappeared over the years). “All that matters is spelling it correctly in Arabic.”

Major Jalloud was something altogether different. Qaddafi’s second-in-command back then, he either didn’t know there was showbiz in the Colonel’s act or he simply didn’t care. Jalloud saw his role as extending the rule of a ruthless tyrant as efficiently and as far as possible. My friend Jacek Kalabinski, who was covering Libya for the Communist radio network in Poland at that time, though he later became a leader himself in the Solidarity movement, put it best: “You can see death in Jalloud’s eyes.”

At the heart of every command decision for Jalloud was the option that someone would die, or at least that‘s the way it seemed. You could joke a bit with Qaddafi, as you can imagine I did, but not with Jalloud, who appeared to have no sense of humor at all.

Nor did anyone who worked for Jalloud. They all believed the revolutionary rhetoric and were determined to enforce it as needed against the people of Libya — killing citizens if they must to preserve the revolution that had freed those very people from the long-forgotten monarchy.

Libya had probably needed political change back in 1969 when Qaddafi and others (conveniently gone shortly thereafter, notice) took down the monarchy. I think history will show, though, that the cure was worse than the disease.

So now we have Libyan troops killing Libyan citizens in both protests and funeral processions. This is completely consistent with Major Jalloud. And it will continue until the government falls or all the protest leaders are dead. Not until the protests end — until the leaders are dead. That’s Major Jalloud’s way and the people of Libya probably know that by now.

Libya is not Tunisia, not Egypt, and not even Saudi Arabia. Libya is a case unto itself. Today’s version of Major Jalloud will see the protests there quickly over followed by months of assassinations to make sure they never happen again. Or if new protest leaders keep emerging to replace those who fall, then Libya, too, may experience regime change, which I guarantee will involve at some point an attempt by Colonel Qaddafi to resume his revolutionary identity and claim leadership of the very movement that is against him now.

Hopefully that dodge will fail, but it will inevitably involve Qaddafi turning on Jalloud, trying to make his number two into the bogeyman before having him killed.

“Scary, isn’t he? ” Qaddafi once asked me of Jalloud.

Yes.

Update — A very helpful reader, Mohammad, has been monitoring the Arabic-language version of Google news for this story and has information to add: “Looking him up in Arabic reveals that he (Jalloud) went behind the scenes in 1993, due to some disagreements with the Qaddafi. However, it seems Qaddafi tried to put him back in one political position back in Nov 2010, and some of the comments on that page suggests that he was being prepared as a scapegoat for the future (http://translate.google.com/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=auto&tl=en&u=http://www.adnkronos.com/AKI/Arabic/Politics/%3Fid%3D3.1.1167196587)- his name is translated by Google to as Leather (Jalloud is a version of an Arabic word meaning Leather). News just came that Qaddafi tried to put him in charge now to lead the anti-protest efforts in Benghazi but he refused (http://translate.google.com/translate?hl=en&sl=auto&tl=en&u=ttp://aawsat.com/details.asp%3Fsection%3D4%26issueno%3D11773%26article%3D609158%26feature%3D, last few paragraphs). It is very sad to see what is happening over there in Libya, and I hope it will not become another genocide as the regime is bringing in mercenaries from Zaire to kill the demonstrators according to eyewitnesses, probably since the country’s own army is not willing to go against the people to the level the Qaddafi wants it to.”

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A longtime reader checked-in today with one more story of Internet generational change.  We used to call it just disintermediation, but in its later stages this syndrome requires new consumers who may have never even visited a bookstore… or had to.

“The family went to Borders today to look for a book or two. The store is closing. I always liked that store on the Middle River in Fort Lauderdale; watching the boats go by as I read the paper.  Anyway we went, the lines were long in checkout, and the discounts were 20 to 40 percent. So I went to IT to wander around, found a few books, figured the 20-40 percent off scanned the bar code with my iPhone Amazon applet and bought with one click at Amazon. Even with the Borders discount Amazon was still cheaper.

Sorry Borders, I did like your coffee, but One-Click is one kick too much.”

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President Obama last night had dinner at John Doerr’s house in Silicon Valley and for some reason I wasn’t invited. I wish I had been. Can you imagine Obama making small talk with Steve Jobs? This is an instance where Steve’s lack of an internal censor probably served the event well, or at least I hope it did, because when it comes to the dinner’s goal of stimulating innovation in America every Administration from any political party needs all the help it can get. I should know, because I’ve been working a bit with those White House would-be innovators, trying to get them in the right groove.

Remember Startup America is the name of the TV series on tech startups I’ve been making for most of the last year. Startup America is also the name of the recently-announced White House initiative on entrepreneurship. Interesting coincidence or brand hijacking?

It was, of course, just an interesting coincidence but I used it as an excuse to accuse them of brand hijacking. Wouldn’t you? So we’re literally moving toward the White House getting an IP license from me. I am not making this up. And it also means they are listening ever so slightly to my advice, because my Startup America is 14 months older than their Startup America and we’ve learned many lessons along the way.

So if you’ve been wondering what’s up with the Startup Tour and Startup America, this is the first of at least three announcements coming this week and next that will explain the next phases for both. Today’s announcement is that I am advising the Obama Administration on this topic. Weird, eh?

Here’s the sort of advice I am giving. There’s a great temptation if you have dinner at John Doerr’s very nice house to buy-in to the Silicon Valley innovation model — to attempt to replicate that in other parts of the country possibly with government assistance. But having visited tech startups in 20 states last year I can say with some conviction that it often won’t work, because the Silicon Valley startup ecosystem isn’t the American startup ecosystem.

This is the Silicon Valley innovation model: 1) get a bunch of really smart people and think up ideas for technology startups; 2) choose a dozen of the best ideas and throw some significant money at them for 6-12 months, and; 3) at the end of a year throw even more money at the two surviving ideas knowing that one of those will also be dead before its second birthday. Brainstorming–seed funding–A-round–success, and of course bloodshed along the way — simple as that.

This model works well in Silicon Valley, where everyone knows people who have worked for eight different companies in the last eight years. But for most of America the model doesn’t work well at all. That’s for three reasons:

1) There often isn’t enough technical talent or if there is, that talent is more risk-averse (or less cocky) than the Silicon Valley crowd.

2) There definitely isn’t enough risk capital outside hotspots like Silicon Valley, Boston or Austin or a few other places that are comfortable with a 90+ percent failure rate. Try that argument down at the bank.

3) The strongest difference between Silicon Valley and real America when it comes to tech startups is how the original idea comes to be. In Silicon Valley you decide to start a company then look for ideas. In real America you have an idea that eventually becomes a company.

That third difference may not sound like much but it is critical. Silicon Valley is a boomtown where everyone is looking for the next vein of gold. In the real America founders more often come up simply with ideas they love that morph over time into products. But since no accelerated, laser-zapped, steroid-boosted in vitro fertilization is involved, these ideas take longer to mature than they would be allowed in Silicon Valley, where success is measured in months, not years.

This doesn’t make provincial ideas any worse than Silicon Valley ideas; in fact they are often better. Nor does it mean those ideas go through more or less evolutionary steps on their way to eventual product maturity. Ideas are ideas. But not all ideas are also dreams, and most startup founders outside Silicon Valley are living the dream that is their technology, not the dream that is their startup.

The result is that companies outside of Silicon Valley start slower and grow both slower and more cheaply. Our Startup America companies were an average of six years old and had gone through in those six years an average of $40,000. Time is money, think about it. To do the same job in one year would have cost $240,000. To do it in six months would have cost $480,000. That’s Silicon Valley kind of money, but six-year, $40,000 money is Uncle Phil money.

So here’s the advice President Obama definitely didn’t get last night at John Doerr’s house. Replicating Silicon Valley in other places usually won’t work. Accelerating innovation isn’t the same as nurturing innovation. Debt financing is close to useless for startups (only ONE Startup America company used debt financing that wasn’t a home equity loan or credit cards). Friends-and-family money is key so find ways to encourage it, though that may not really make a difference. Slow nurturing builds good products, too, so don’t assume that a five year-old startup is a failure or penalize it simply for being five years old.

People who are doing what they love are generally doing good work.

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Maybe it was that column I wrote recently about AOL buying the Huffington Post, but I swear AOL has turned on me. Share my pain.

Back in the early 1990s I got an AOL dial-up account to use while traveling. It was one of the few Internet services that had global dial-up, so I could get connected from England to India (and did). I kept the account out of sheer laziness, as I am sure do many of the 3.65 million remaining AOL paying dial-up customers, but eventually AOL-itself converted my e-mail to free and escaped from my credit card bill. So then I had a free AOL e-mail account to go with my Yahoo Mail and others. No big deal.

Until someone contacted me yesterday saying they were being spammed from my AOL account. Time to shut that puppy down.

Only I can’t.

To change any free AOL settings you have to first answer a security question, which in my case is “where was your first job?” As best I can remember my first job-job with an actual paycheck was working at a library back in Ohio shelving books when I was 12 making, as I recall, 75 cents per hour. So in answer to the security question I typed “library.”

Invalid answer.

“Public library.”

Invalid answer.

Those are the only two permutations I could come up with. Listen, it’s my life and I am telling you the frigging answer is “library.”

Okay, so I clicked on “forgot security question,” and AOL took me to an alternate page where I was requested to provide my address, day and evening phone numbers, and the last four digits of my credit card number all from 1996!

I can’t contact support because free accounts don’t get any, but I can upgrade to a $4.99 per month level that does offer support then cancel within 30 days. Hell, I’ll cancel within 30 minutes.

AOL won’t let me upgrade.

They can’t even take my money, at least not tonight.

So I sent some nasty messages to AOL customer support, but since I don’t get any support the messages don’t really go anywhere and weren’t satisfying in any case. All I could think to do then was to go into the e-mail account itself and empty my old address book and delete every piece of mail. I’m not sure it will help, though, because I can’t change my password and whoever has hacked me seems to have consolidated my address book with one from a guy whose interest in penis enlargement is, well, large.

What do I do? How would you escape from AOL Hell?

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When John Sculley forced Steve Jobs out of Apple back in 1985, the former PepsiCo marketing executive very quickly produced dramatic improvements in Apple’s profitability.  Apple wasn’t losing money before, but Sculley improved the bottom line by about $200 million (a lot in those days) simply by cutting all of Steve Jobs’s pet projects that appeared to have poor prospects. Sculley raised profits by cutting expenses not by increasing sales. Expect the same thing at Nokia where, ignoring for the moment the “enormous payments” Microsoft will be making according to Nokia CEO Stephen Elop, the company can probably cut its software development budget to near-zero, saving $1 billion or more and increasing profits by that amount.

It’s one of those moments like when Cortez burned his ships to concentrate his conquistadores fully on their job of subjugating the Yucatan. Elop is burning his software development capability, betting on Microsoft. Sure, Symbian will be around for awhile in Nokia products, but two years from now it should be gone. And in that interim period, between lower development costs and Microsoft subsidies, Nokia will look better to investors even if its smart phone market share continues to fall.

That’s why Nokia did the deal with Microsoft, which will be assuming the burden of all that software development and paying Nokia for the privilege. It’s a short-term play that makes perfect sense in an industry where CEOs last an average of four years. Stephen Elop’s four years are now fairly certain, his golden parachute packed and ready.

Two years ago such a move would have been impossible in Europe simply because of employment laws making it very difficult to dump workers. But the current European financial crisis has changed that somewhat and Nokia’s obligations probably aren’t as onerous as they once would have been. Austerity is the thing these days in Northern Europe and almost everywhere else.

Now you might think I’d be against all this but I am not. Compared to Android and iOS, Symbian was, in a word, crap. We can have geeky arguments about it all day but the market has spoken loudly and I am right. Elop was right to make a platform change and righter still to do it this way, primarily at Microsoft’s expense. Nokia had to get out from under its bad software culture and this was by far the most elegant way to do it.

But having said that, I still don’t think it will work.

Trading Symbian for Windows Phone 7 with a $100 bill attached is still trading the worst smart phone platform for maybe the third best. With Blackberry retooling and coming up fast and HP’s WebOS as a dark horse backed by massive manufacturing capability, it isn’t at all clear that Nokia has selected a winner. Which is why I have some advice for Stephen Elop.

Nokia should put some of that Microsoft money into emulating Google’s Android development, where 25 programmers humbled the 1000+ working on Symbian. Hire a Bob Lee (or heck, hire Bob Lee), set up a small development office somewhere in the USA, and spend $5 million per year aiming at mobile life after Microsoft. By tying hardware and software as Apple has done with the iPhone and iPad (and Google, by definition, can’t do) Nokia can head Apple off at the pass with the equivalent of the iPhone 7, three years from now.

That’s what Nokia should do, but of course by then Elop will already by gone.

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Nokia today announced that the Finnish cellphone company is choosing Windows 7 Phone as the operating system for its future smart phones. It’s not a surprising move given that Nokia CEO Stephen Elop came from Microsoft and it’s not even that risky a move given that the alternative was a slow but certain death for Nokia smart phones running Symbian and Meego. Sure Nokia could have gone with Android, but Google has less at risk than Microsoft so Redmond had much more to offer. The only real question here is whether Nokia can make the new strategy a success?  I think they can, but there is only one way to do it — by rushing the net.

I’m no tennis player, but my understanding of this tactic (rushing the net) is that you hit deep into your opponent’s territory using a lot of topspin to make the ball harder to return then run right up to the net and attempt to slam his return shot into the forecourt while your opponent is still in the backcourt and unable to reach the ball. The Nokia version of this tactic would be to introduce the best-ever Windows 7 Phone (faster processor, better screen, expanded services, competitive price) then simultaneously introduce  another line of Windows 7 phones that have 80 percent of that capability for 20 percent of the price.

Nokia has already lost the elites but they have to make a credible showing toward the top of the market to stay in the game at all. This is one of those instances, though, where the company really can make it up in volume. They have to essentially cannibalize their own feature phone business to save the smart phone business.

Think about it. The life expectancy of a mobile phone is 18 months, meaning phone users are literally forced to change on a regular basis, often switching platforms in the process. Even buying another phone from the same vendor is a decision because the phones change so much in that time. That’s what makes the mobile handset business such a bloodbath where Motorola can be on top one minute with its Razr then a dog the next with the same phone. Phones are getting ever more powerful, too, thanks to Moore’s Law and the many cloud services coming online. So a Nokia decision to lean-into smart phones at the expense of feature phones is really just a decision to accelerate the inevitable.

Feature phones have one generation left to live. Three years from now every mobile phone will be a smart phone.

To embrace this, however, means going aggressively down-market. Apple has done this with the $49 iPhone 3GS. Nokia needs to do the same thing only even more aggressively. They need a $29 smart phone.

Here is the transition we are likely to see. Cheaper smart phones are coming. There was a story just this week about Apple announcing a cheaper smart phone this summer. I can see it now: at the WWDC in June Apple will announce the expected multi-core, 4G, international-ready, whiter-then-white, 1.2-GHz iPhone 5, but the “one more thing” will be a repackaged, smaller form-factor, $29 iPhone 3GS. Nokia has to not only have a response to this move by Apple, they must preempt it with an earlier announcement of their own.

Nokia (and Microsoft’s) survival in the phone market is dependent on staking out the lower end of the market where people buy on price as much as features and brand loyalty is less of an issue. Apple is heading there and Android is there already. Only by rushing the net — by following the time-honored Microsoft technique of throwing bodies and staggering amounts of money at a problem in a market-changing way — can these companies remain relevant in the mobile space.

But they have only one chance to make it work and they’ll have to take that chance before June.

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Digital Equipment Corporation founder and longtime CEO Ken Olsen died this week at 84. I never met Ken Olsen, but I have a sense of him through his products. The first computer I ever programmed was a PDP-1 accessed over an old TTY terminal from my junior high school. At one point in the 1980s I owned a PDP-8 I bought as salvage and installed in my California cellar. Not only did that old PDP-8 give me many hours of fun as I brought it back to life, it also heated my bungalow! So when I think of Ken Olsen, I think of industrial-strength computers.

Avram Miller did know Ken Olsen and has a recollection of Olsen here.  But the most telling story about Olsen that Avram tells isn’t in his blog.  It was about how he and Ken Olsen bought one of the first IBM PCs and disassembled it on a table in Olsen’s office.

“He was amazed at the crappy power supply,” Avram said, “that it was so puny.  Olsen thought that if IBM used such poor engineering then Digital didn’t have anything to worry about.”

Clearly Olsen was wrong.

I find this little story very telling because it shows Olsen in 1980 very much stuck in the late 1960s when it came to what mattered and what didn’t in a computer.  Yes, having a robust power supply was good for computer reliability, but not as important as having a great operating system and applications. But that’s not the way Olsen saw it.  In a world that had to that point been dominated by computer companies building expensive products aimed primarily at engineers, he simply had no concept of a computer as a consumer product.

No wonder Olsen and Digital together pretty much missed the personal computing revolution. They thought robustness was a prime virtue and that the market would not only wait for it, but would pay a premium for it, too. Fat chance.

Practically from that moment when Olsen and Miller had the IBM box apart on that table, Digital peaked as a company.  Yes, readers will comment that the Rainbow 100 was great (though I don’t remember it as being so) or the Professional line was, well, very professional, but the computing market had already moved past professionalism and into the mainstream when those boxes were introduced only to fail.

Olsen lasted as Digital CEO for another 12 years and to be fair the company had another chance to succeed after Olsen’s departure, but again they blew it.

In the early 1990′s DEC was quietly becoming a PC network powerhouse.  They finally figured out what companies with thousands of PC’s needed and were slowly building a family of products.  Sure Novell was the powerhouse during this time, but I think DEC had a better enterprise perspective.  Their wide area networking was mature and they were in a better position to support TCP/IP than others.  Towards the end DEC’s networking group was their only growth division and was very profitable.

Then CEO Robert Palmer (Olsen’s successor) severely cut the networking division’s budget.  DEC had a window of opportunity to become a major force in the PC and network industry and Palmer killed it.  DEC could have been Cisco.  Instead, he put all of DEC’s marbles into their Alpha (AXP) development, another hardware platform.  It was the same kind of mistake that Olsen had made before him. Digital didn’t sell enough AXP systems to keep the company afloat.

DEC had a lot of employees.  In any given market DEC usually had at least twice as many people in its branch offices than either IBM or HP.  They had armies of folks back at HQ too.  Most companies find a way to measure the value of their employees.  In sales i its easy, value can be determined by how much you sell and how much profit the company makes from your efforts.  In product groups you can determine how much profit is created by your product.  By the size of their workforce I don’t think DEC gave enough attention to the value each person was bringing to the company.  When DEC ran out of money, the fall was big and painful.  It was hard to watch.  Years later when I meet former DEC employees a common thread of discussion is on how badly the business was managed.

While Ken Olsen invented the mini-computer and started DEC, in the end it was not a sustainable business simply because of bad management.

Simply being smart is not enough.

When Olsen relinquished control it was already too late.