Follow-up on the post “Enhancing Australian IT Research”

[Edit: Gernot has put a further discussion of the points raised both in the previous post and this one, which you can find here. In this one, Gernot clearly explains why approaches were taken the way they were, how NICTA is benefiting from the ongoing work (as are we) and further identifies that the original article didn’t manage to capture a lot of the detail of what had happened. My thanks again to Professor Heiser for taking the time to respond to this so thoroughly and so patiently!]

I’ve put this back up on the top so that you can read Professor Gernot Heiser’s response to the points I raised in my blog post “Enhancing the Reputation of Australian IT Research – by giving it away?” Gernot’s main point is that I don’t understand the spin-off and VC process, which has thus led to the misinterpretation of the Australian IT article (which he also finds fault with). He has taken the time to write a blog post on it that you can read over here. I have also edited the original post to include a reference to this, which I’ve put there for people reading it from scratch, as I am very serious about the final statement on the piece, namely that:

If Professor Heiser is reading this, then I welcome any clarification that he can make and, in the Australian have miscast this, then I welcome and will publish any supported correction. I sincerely hope that this is merely a miscommunication because the alternative is really rather embarrassing for all concerned.

I also posted a comment on Gernot’s blog that he hasn’t yet had time to moderate (I posted it late last night so I’m expecting that he’s asleep!), so I post it below, because the Internet is immediacy. (You’ll note that I used ‘posted’ instead of ‘written’ for the Australian – I’m becoming contaminated!)

“Hi Gernot,

I welcome the correction, as I noted in the original article. However, what was posted in the Australian left, to my reading, some serious questions open and, while you have addressed most of these here, they weren’t addressed in the original article. I, as I referred to it in my blog post, was reading the Australian and questioning the content because, in my opinion it cast this whole situation in a strange light.

I do find it interesting that you find my blog less accurate than the article as I had believed that I had addressed the article specifically and raised questions where I asked you, if you were reading it, to clarify issues. I never claimed to be the final interpreter on this – the note I finished on was (and I quote):

“If Professor Heiser is reading this, then I welcome any clarification that he can make and, in the Australian have miscast this, then I welcome and will publish any supported correction. I sincerely hope that this is merely a miscommunication because the alternative is really rather embarrassing for all concerned.”

I can assure that my search for clarification and expansion of, what now appears to be, a misleading piece of reportage was genuine. As you have placed a comment on the blog, which I have now approved, people can read both and now see a true dialogue – the power of the Internet.

One point that you don’t seem to have addressed, which I expect will occur in post 2, is how this specifically enhanced the reputation of Australian IT research. You mention that “NICTA isn’t a software business, it’s a national research lab, which produces world-class research and then gets the results out into the real world for the benefit of the nation.” – we’re obviously on the same page here – so are you arguing benefit in terms of to the VCs (as selling the product to an overseas owner is not, to my perspective, of immediate benefit to Australia except as a one-off payment, which is not being returned as originally discussed) or in terms of local jobs retained, despite the foreign ownership? (Although this was not reported in the original article – the intention is to retain the staff of the start-up as a remote division.)

Had I read the original NICTA release, dry and short though it is, I would have had very few questions. What piqued my curiosity was the way that the situation was reported in the paper and, as I believe we both agree, this did raise a number of questions, the vast majority of which you have addressed above.

There are, however, two things that I would like to note. You state that I misinterpret the role of start-ups, when I don’t believe that I refer to them in any way. There may be a subtlety that I’m missing so, again, clarification is welcome. You also say that claims that NICTA sold the labs are wrong, however, from the original article:

“NICTA last week announced it had sold one of its spin-off companies, Open Kernel Labs, that had developed virtualisation security software used on 1.6 billion mobile devices worldwide to the US giant.” (This was the Australian. A similar story was run on ZDNet and elsewhere. On digging, the GD and NICTA pages themselves refer to ‘acquisition’, without stating a seller.)

Given that most of us are not privy to the internal workings of NICTA, you can see how such an interpretation would have arisen, as there are (as you have identified) so many models to choose from. Yes, the investors may have decided it but we on the outside can only go on what we are told and the Australian and ZD reports are pretty decisive – although wrong as it turns out.

Thank you again, very genuinely, for the clarification. I look forward to section 2!

Regards,
Nick.”

On reading Gernot’s comments, I can completely understand the model that was taken but I am looking forward to Part 2, because while I can see why the different models exist, I’m still looking for that decisive statement of national benefit that was lacking from the paper. One of the final statements in Gernot’s response is:
“This is simply the standard VC investment model. If you don’t like it, don’t ask for venture capital!”

And I will address this. I always understood why the VC investors got their money, and why the bankers got theirs. I even understood why NICTA would trade away IP in attractive deals in order to attract funding. What, and I realise that this may be me just being slow, I am asking is how a project that has taken at least a chunk of federal funding, which has then parlayed that into a bigger company, is giving a national benefit return on that initial investment, given that it was the catalyst for the later financial structures.

I reiterate that I welcome the clarification as I feel that we have all benefitted from the extra information but I’m not sure that I introduced anything new into that Australian IT story than a dissection and contemplation, again, because it was so damn odd. I am really looking forward to Part 2, which I hope will further discuss the realities of running organisations like NICTA in the 21st Century.



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