Vaporware

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The U.S. Justice Department accused IBM of intentionally announcing its System/360 Model 91 computer (pictured) three years early to hurt sales of its competitor's computer.

Vaporware is a term in the computer industry that describes a product, typically computer hardware or software, that is announced to the general public but is never actually released nor officially cancelled. Vaporware is also a term sometimes used to describe events that are announced or predicted, never officially cancelled, but never intended to happen. The term also generally applies to a product that is announced months or years before its release, and for which public development details are lacking. The word has been applied to a growing range of products including consumer, automobiles, and some stock trading practices. At times, vendors are criticized for intentionally producing vaporware in order to keep customers from switching to competitive products that offer more features.[1]

Publications widely accuse developers of announcing products early intentionally to gain advantage over others. Network World magazine called vaporware an "epidemic" in 1989, and blamed the press for not investigating whether developers' claims were true. Seven major companies issued a report in 1990 saying they felt vaporware had hurt the industry's credibility. The United States accused several companies of announcing vaporware early in violation of antitrust laws, but few have been found guilty. InfoWorld magazine wrote that the word is overused, and places an unfair stigma on developers.

"Vaporware" was coined by a Microsoft engineer in 1982 to describe the company's Xenix operating system, and first appeared in print in a newsletter by entrepreneur Esther Dyson in 1983. It became popular among writers in the industry as a way to describe products they felt took too long to be released. InfoWorld magazine editor Stewart Alsop helped popularize it by lampooning Bill Gates with a Golden Vaporware award for the late release of his company's first version of Windows in 1985. Vaporware first implied intentional fraud when it was applied to the Ovation office suite in 1983; the suite's demonstration was well received by the press, but was later revealed to have never existed.

Etymology[edit]

In a January 1982 of the new IBM Personal Computer, BYTE magazine favorably noted that IBM "refused to acknowledge the existence of any product that is not ready to be put on dealers' shelves tomorrow. Although this is frustrating at times, it is a refreshing change from some companies' practice of announcing a product even before its design is finished".[2] The first reported use of the word "vaporware" was in 1982 by an engineer at the computer software company Microsoft.[3] Ann Winblad, who was president of Open Systems Accounting Software, wanted to know if Microsoft planned to stop developing its Xenix operating system. Some of Open System's products depended on it. She went to Microsoft's offices, and asked two software engineers there, John Ulett and Mark Ursino, who confirmed that development of Xenix had stopped. "One of them told me, 'Basically, it's vaporware'," she later said. Winblad compared the word to the idea of "selling smoke", implying Microsoft was selling a product it would soon not support.[4]

Influential writer Esther Dyson (pictured here in 2008) popularized the term "vaporware" in her November 1983 issue of RELease 1.0

The word was told by Winblad to influential computer expert Esther Dyson,[4] and Dyson published it for the first time in her monthly printed newsletter RELease 1.0. In an article titled "Vaporware" in the November 1983 issue of RELease 1.0, Dyson defined the word as "good ideas incompletely implemented". She described three software products shown at the Computer Dealer's Exhibition in Las Vegas that year that were being advertised bombastically. In her words, demonstrations of the "purported revolutions, breakthroughs and new generations" shown at the exhibition did not meet those claims.[5][6]

After Dyson's article was published, the word became popular among writers in the then small personal computer software industry as a way to describe products they felt took too long to be released after their first announcement.[3] InfoWorld magazine editor Stewart Alsop helped popularize its use in this way by lampooning Bill Gates, then CEO of Microsoft, with a Golden Vaporware award for the 18-month late release of Microsoft's first version of Windows in 1985. Alsop presented it to Gates at a celebration for the release while the song "The Impossible Dream" played in the background.[7][8]

"Vaporware" took another meaning when it was used to describe a product that did not exist. A new company named Ovation Technologies announced their office suite Ovation in 1983.[9] The company invested in an advertising campaign that promoted Ovation as a "great innovation", and showed a demonstration of the program at computer trade shows.[3][10] The demonstration was well received by writers in the press, featured in a cover story for an industry magazine, and reportedly created anticipation among potential customers.[10] It was later revealed by executives that Ovation never existed. The fake demonstration was created in an attempt by the company to raise money to finish their product, but they could not. This was the first time the word "vaporware" was used to imply intentional fraud,[9] and is "widely considered the mother of all vaporware," according to Laurie Flynn of The New York Times.[3]

"Vaporware", sometimes synonymous with "vaportalk" in the 1980s,[4] has no single definition. It is generally used to describe a hardware or software product that has been announced, but that the developer has no intention on releasing anytime soon, if ever.[6][11] Use of the term has gradually become more inclusive in the last three decades. Newsweek magazine's Allan Sloan described the manipulation of stocks by Yahoo! and Amazon.com as "financial vaporware" in 1997.[12] Popular Science magazine uses a scale ranging from "vaporware" to "bet on it" to describe release dates of new consumer electronics.[13] Car manufacturer General Motors' plans to develop and sell an electric car were called vaporware by an advocacy group in 2008.[14]

Causes and use of "vaporware"[edit]

Late release[edit]

The term is like a scarlet letter hung around the neck of software developers. [...] Like any overused and abused word, vaporware has lost its meaning.

—James Fawcette, "Press' Vaporgate", 1985

A product missing its announced release date, and the labeling of it as vaporware by the press, can be caused by its development taking longer than planned. Most software products are not released on time, according to researchers who studied the causes and effects of vaporware in 2001.[8] Software development is a complex process, and developers are often uncertain how long it will take to complete any given project.[8][15] Fixing errors in software, for example, can make up a significant portion of its development time,[8] and developers are motivated not to release software with errors because it could damage their reputation with customers.[8] Last-minute design changes are also common.[8] In 1986, the American National Standards Institute adopted SQL as the standard database manipulation language. Software company Ashton-Tate was ready to release their dBase IV database manipulation program, but pushed the release date back to add support for SQL. They felt their product would not be competitive without it.[10] On to the popular use of the word "vaporware" by writers in the mid-1980s, InfoWorld magazine editor James Fawcette wrote that its negative association was unfair to developers because of situations like these.[16]

Vaporware also includes announced products that are never released because of financial problems, or because the industry changes during its development.[10] When 3D Realms first announced their video game Duke Nukem Forever in 1997, it was early in its development.[17] The company's previous game released in 1996, Duke Nukem 3D, was a critical and financial success, and customer anticipation for its sequel was high. As personal computer hardware speeds improved at a rapid pace in the late 1990s, it created an "arms race" between companies in the video game industry, according to Wired News. 3D Realms repeatedly moved the release date back over the next 12 years to add new, more advanced features. By the time 3D Realms went out of business in 2009 with the game unreleased, Duke Nukem Forever had become synonymous with the word "vaporware" among industry writers.[18][19] The game was revived and released in 2011.

Early announcement[edit]

Announcing products early—months or years before their release date,[20] also called "preannouncing",[21] has been an effective way by some developers to make their products successful. It can be seen as a legitimate part of their marketing strategy, but is generally not popular with industry press.[22] The first company to release a product in a given market often gains an advantage. It can set the standard for similar future products, attract a large number of customers, and establish its brand before competitor's products are released.[10] Public relations firm Coakley-Heagerty used an early announcement in 1984 to build interest among potential customers. Their client was a former employee of Atari who wanted to market his new arcade game, but his contract with Atari prohibited it until a later date. The firm created an advertising campaign—including brochures and a shopping-mall appearance—around a large ambiguous box covered in brown paper to "stall for time" until the game could be announced.[4]

Early announcements send signals not only to customers and the media, but also to providers of support products, regulatory agencies, financial analysts, investors, and other parties.[22] For example, an early announcement can relay information to vendors, letting them know to prepare marketing and shelf space. It can signal third-party developers to begin work on their own products, and it can be used to persuade a company's investors that they are actively developing new, profitable ideas.[21] When IBM announced its Professional Workstation computer in 1986, they noted the lack of third-party programs written for it at the time, signaling those developers to start preparing. Microsoft usually announces information about its operating systems early because third-party developers are dependent on that information to develop their own products.[21]

A developer can strategically announce a product that is in the early stages of development, or before development begins, to gain competitive advantage over other developers.[23] In addition to the "vaporware" label, this is also called "ambush marketing", and "fear, uncertainty and doubt" (FUD) by the press.[21] If the announcing developer is a large company, this may be done to influence smaller companies to stop development of similar products. The smaller company might decide their product will not be able to compete, and that it is not worth the development costs.[23] It can also be done in response to a competitor's already released product. The goal is to make potential customers believe a second, better product will be released soon. The customer might reconsider buying from the competitor, and wait.[24] In 1994, as customer anticipation increased for Microsoft's new version of Windows (codenamed "Chicago"), Apple announced a set of upgrades to its own System 7 operating system that were not due to be released until two years later. The Wall Street Journal wrote that Apple did this to "blunt Chicago's momentum".[25]

my own estimate is that at the time of announcement, 10% of software products don't actually exist [...] Vendors that are unwilling to [prove it exists] shouldn't announce their packages to the press

—Joe Mohen, "vaporware epidemic", 1989

Industry publications widely accused companies of using early announcements intentionally to gain competitive advantage over others. In his 1989 Network World article, Joe Mohen wrote the practice had become a "vaporware epidemic", and blamed the press for not investigating claims by developers. "If the pharmaceutical industry were this careless, I could announce a cure for cancer today – to a believing press."[26] In 1985, Stewart Alsop began publishing his influential monthly Vaporlist, a list of companies he felt announced their products too early, hoping to dissuade them from the practice.[3] Wired Magazine began publishing a similar list in 1997. Seven major software developers—including Ashton-Tate, Hewlett-Packard and Sybase—formed a council in 1990, and issued a report condemning the "vacuous product announcement dubbed vaporware and other misrepresentations of product availability" because they felt it had hurt the industry's credibility.[27]

Antitrust allegations[edit]

Announcing a product that does not exist to gain a competitive advantage is illegal via Section 2 of the Sherman Antitrust Act of 1890, but few hardware or software developers have been found guilty of it. The section requires proof that the announcement is both provably false, and has actual or likely market impact.[28] False or misleading announcements designed to influence stock prices are illegal under United States securities fraud laws.[29] The complex and changing nature of the computer industry, marketing techniques, and lack of precedence for these laws applied to the industry can mean developers are not aware their actions are illegal. The U.S. Securities and Exchange Commission issued a statement in 1984 with the goal of reminding companies that securities fraud also applies to "statements that can reasonably be expected to reach investors and the trading markets".[30]

Several companies have been accused in court of using knowingly false announcements to gain market advantage. In 1969, The United States Justice Department accused IBM of doing this in the case United States v. IBM. After IBM's competitor Control Data Corporation (CDC) released their computer, IBM announced they planned to sell a more advanced computer soon—its System/360 Model 91. The announcement resulted in a significant reduction in sales of CDC's product. The Justice Department accused IBM of doing this intentionally because the System/360 Model 91 was not released until three years later.[31][32] The practice was not called "vaporware" at the time, but publications have since used the word to refer specifically to it. Similar cases have been filed against Kodak film company, AT&T, and Xerox.[33]

US District Judge Stanley Sporkin was a vocal opponent of the practice during his review of the settlement resulting from United States v. Microsoft in 1994. "Vaporware is a practice that is deceitful on its face and everybody in the business community knows it," said Sporkin.[34] One of the accusations made during the trial was that Microsoft has illegally used early announcements. The review began when three anonymous companies protested the settlement, claiming the government did not thoroughly investigate Microsoft's use of the practice. Specifically, they claimed Microsoft announced its Quick Basic 3 program to slow sales of its competitor Borland's recently released Turbo Basic program.[33] The review was dismissed for lack of explicit proof.[33]

Examples[edit]

See also[edit]

Notes[edit]

  1. ^ Vapour-ware definition of Vapour-ware in the Free Online Encyclopedia. Encyclopedia2.thefreedictionary.com.
  2. ^ Williams, Gregg (January 1982). "A Closer Look at the IBM Personal Computer". BYTE. p. 36. Retrieved 19 October 2013. 
  3. ^ a b c d e Flynn (1995), p. 1.
  4. ^ a b c d Shea (1984).
  5. ^ Dyson (1983), pp. –6.
  6. ^ a b Bayus; Jain; Rao (2001) p. 3.
  7. ^ Garud (1997); Ichbiah cited in Bayus; Jain; Rao (2001) p. 3.
  8. ^ a b c d e f Bayus; Jain; Rao (2001), p. 5.
  9. ^ a b Flynn (1995), p. 2.
  10. ^ a b c d e Jenkins (1998).
  11. ^ Prentice; Langmore (1994) p. 11.
  12. ^ Sloan (1997)
  13. ^ "What's New". Popular Science (Bonnier Corporation): 15. 1 March 2007. ISSN 0161-7370. Retrieved 2010-04-15. 
  14. ^ Bersinger, Ken (5 April 2008). "Road for electric car makers full of potholes". Los Angeles Times. Retrieved 2010-04-19. 
  15. ^ Johnston; Betts (1995).
  16. ^ Fawcette (1985).
  17. ^ Thompson (2009).
  18. ^ Kesten, Lou (11 April 2009). "R.I.P. `Duke Nukem Forever'". ABC News. ABC News Internet Ventures. Retrieved 2010-04-15. [dead link]
  19. ^ Kane, Yukari Iwatani (7 May 2009). "Duke Nukem Nuked". The Wall Street Journal Blogs (Dow Jones & Company). Retrieved 2010-04-14. 
  20. ^ Prentice; Langmore (1994) p. 2.
  21. ^ a b c d Prentice (1996), p. 3.
  22. ^ a b Prentice (1996), p. 4.
  23. ^ a b Bayus; Jain; Rao (2001), p. 4.
  24. ^ Haan (2003).
  25. ^ Zachary; Carlton (1994)
  26. ^ Mohen (1989).
  27. ^ Messmer (1990).
  28. ^ Bayus; Jain; Rao (2001), p. 11.
  29. ^ Prentice; Langmore (1994) p. 15.
  30. ^ SEC (1994) cited in Prentice; Langmore (1994) p. 17.
  31. ^ Gerlach (2004).
  32. ^ "IBM Antitrust Suit Records". Hagley Museum and Library. Retrieved 2010-04-14. 
  33. ^ a b c Stern (1995).
  34. ^ Yoder (1995) cited in Bayus; Jain; Rao (2001), p. 5.

References[edit]

  • Flynn, Laurie (24 April 1995). "The Executive Computer". The New York Times (The New York Times Company). ISSN 0362-4331. Retrieved 2010-04-14. 
  • Dyson, Esther (28 November 1983). "Vaporware". RELease 1.0 (Rosen Research): 5. 
  • Shea, Tom (7 May 1984). "Developers Unveil 'Vaporware'". InfoWorld (InfoWorld Media Group) 6 (19): 48. ISSN 0199-6649. Retrieved 2010-04-13. 
  • Bayus, Barry L.; Jain, Sanjay; Rao, Ambar G. (1 February 2001). "Truth or consequences: An analysis of vaporware and new product announcements". Journal of Marketing Research (American Marketing Association) 38 (1): 3–13. doi:10.1509/jmkr.38.1.3.18834. ISSN 0022-2437. 
  • Johnston, Stuart J.; Betts, Mitch (13 February 1995). "Industry debates U.S. vaporware probe". Computerworld (Computerworld): 2. ISSN 0010-4841. 
  • Jenkins, Avery (5 October 1998). "Long overdue; The reasons behind vaporware". Computerworld (Computerworld): 10. ISSN 0010-4841. 
  • Gerlach, Heiko A. (2004). "Announcement, entry, and preemption when consumers have switching costs.(econometric analysis)". RAND Journal of Economics (The RAND Corporation) 35 (1): 184. ISSN 0741-6261. 
  • Haan, Marco A. (1 September 2003). "Vaporware as a Means of Entry Deterrence". The Journal of Industrial Economics (John Wiley and Sons) 51 (3): 345–358. doi:10.1111/1467-6451.00204. ISSN 0022-1821. 
  • Stern, Richard H. (April 1995). "Microsoft and vaporware". IEEE Micro Magazine (IEEE) 15 (2): 6–7. ISSN 0272-1732. 
  • Messmer, Ellen (22 October 1990). "Software firms form group to raise ethics". Network World (IDG Network World) 7 (43): 9. ISSN 0887-7661. Retrieved 2010-04-14. 
  • Mohen, Joseph (19 June 1989). "Seeking a cure for the vaporware epidemic". Network World (IDG Network World) 6 (24): 32. ISSN 0887-7661. Retrieved 2010-04-13. 
  • Fawcette, James E. (10 June 1985). "Press' Vaporgate". InfoWorld (InfoWorld Media Group) 7 (23): 5. ISSN 0199-6649. Retrieved 2010-04-14. 
  • Prentice, Robert (1996). "Vaporware: imaginary high-tech products and real antitrust liability in a post-Chicago world". Ohio State Law Journal 57 (4). ISSN 0048-1572. 
  • Thompson, Clive (21 December 2009). "Learn to Let Go: How Success Killed Duke Nukem". Wired News (Condé Nast Digital). Retrieved 2010-04-15. 
  • Sloan, Allan (28 April 1997). "Financial Vaporware". Newsweek 129 (17): 57. 
  • Prentice, Robert A.; Langmore, John H. (1994). "Beware of varpoware: product hype and the securities fraud liability of high-tech companies". Harvard Journal of Law & Technology (Harvard Law School) 8 (1). ISSN 0897-3393. Retrieved 2010-04-16. 
  • Zachary, G. Pascal; Carlton, Jim (7 March 1994). "Software rivals vying to define how PCs work". The Wall Street Journal (eastern edition) (Dow Jones & Company). ISSN 0099-9660. 

External links[edit]

Wired Magazine Vaporware Awards