Crapware is in the news in a big way this week thanks to Oracle’s recent Java “security” update and a blog post by Long Zheng that exposes the economic incentives for software developers to bundle crapware installers. He also points out that respected Silicon Valley VCs are funding Crapware-installer InstallMonetizer. Ed Bott pulls the story together in his ZDNet piece.

One of the things coming out in all of this is that Microsoft, usually seen as one of the victims in the spread of crapware, is not completely innocent in this matter. For example, Microsoft’s Online Services Division (OSD) at one point used InstallMonetizer to distribute its Bing and MSN toolbars. And for a period (before Sun was acquired by Oracle) OSD had a deal to distribute the Bing toolbar with Sun’s Java distribution. OSD wasn’t alone in this as Developer Division used this technique (and often piggybacks on OSD’s deals) to distribute Silverlight. So how did we get here?

You probably know the general story behind crapware on PCs, but I’ll do a quick refresh. Competition in a commodity market left PC makers unable to price their products to make a profit. On top of that, gaps in the completeness of Windows (e.g., no antivirus or inability to create a DVD) left openings that OEMs had to fill. Finally Microsoft’s antitrust settlements forced them to allow OEMs to replace the parts of Windows considered “middleware” such as Internet Explorer. Numerous software vendors than stepped in to offer OEMs payments in exchange for equipping their PCs with trial or lite editions of the software vendor’s product. Soon every PC came with a dizzying array of these third-party products, most unwanted by the consumer. Besides that, the PC usage experience degraded as each PC offered a completely different experience. And basically, there was nothing Microsoft could do about it.

Eventually other players in the industry recognized that they could get in on the game. In particular Adobe (with Reader and Flash), Sun/Oracle (Java), and HP (printers) figured they could make money off of their free software by doing crapware distribution deals just like PC vendors.

Microsoft’s own foray into the world of crapware came as the result of the intersection between its antitrust woes and the business practices of Google and Yahoo in the search space. In order to drive search traffic to their engines Google and Yahoo engaged in signing up PC vendors to make their search engines the default on new PCs and to install their toolbars. These were huge deals. The original deal that Dell got to make Google the search default on its PCs may have brought them revenues (almost all pure profit) in excess of $1 Billion (yes, with a B)! I have no idea what the total value of this deal has been over the years, but obviously it has been huge. Yahoo had a similar deal with HP, and Google and Yahoo pretty much split the rest of the PC vendors.

Now Microsoft comes along and decides it wants (nay needs) to get into the search game, but it has no control over search defaults. Sure Microsoft ships Windows Internet Explorer set to use MSN Search/Live Search/Bing, but all the OEMs have been paid to change this before actually shipping their systems. Microsoft can’t block (or make this difficult) because of antitrust agreements. And even their ability to include toolbars or other software from separate Microsoft products/services in Windows is subject to scrutiny. The only option they really have is to use the same tactics as Google and Yahoo, so they start competing to get deals with PC and free software vendors to make Bing the default search engine and install its toolbar.

One of the big early deals was for OSD to win Lenovo away from Google. Later they would win HP (first printers, then PCs) away from Yahoo. Microsoft also had a deal with Sun (believe it or not) to distribute the toolbar with Java! With Java on most of the world’s PCs this was an amazing way to reach the broad user base with Bing.

On a side note, I may have been the person who first brought up approaching HP to do a deal to distribute the (then Live Search) toolbar with HP’s printer software. I was just thinking about who had really broad reach that wasn’t already locked up and that’s what came to mind. One of my friends was running Live Search marketing and I suggested it to him. The actual deal happened so much later that perhaps my suggestion had nothing to do with it. But still, I accept it as my own little contribution to the crapware problem.

Of course Google would go on to so dominate search that I’m not really sure how much of a difference these deals made. Or maybe a better way to think about it is that by the time Microsoft decided it had to win these deals it was too late. In particular it seems like the Dell deal was the last one to really make a difference in that phase of competition for search market share. Soon thereafter every Internet user had their favorite search engine and search defaults and toolbars could make only fractional differences.

Silverlight had a similar problem in going up against Adobe Flash. Flash had near universal presence on client PCs, meaning that web developers felt they could safely build sites using it. To solve the chicken and egg problem (clients didn’t need to install it since no web sites used it, web sites wouldn’t use it because clients didn’t have the bits installed) Developer Division pursued a number of tracks. Signing up high-profile sporting events to “broadcast” with Silverlight, for example, gave clients incentive to install Silverlight. Working with those who had Bing toolbar distribution deals to also distribute Silverlight was another tactic. I don’t know how far Silverlight installs got before it became apparent that the age of Flash and Silverlight were over, but Microsoft did make a substantial dent in getting Silverlight onto client PCs.

One of the differences between what I recall seeing for both Bing and Silverlight and what we see Adobe and Oracle doing today is that I belive all of the Microsoft deals were Opt In. So the user was offered the Bing Toolbar and defaults, but they had to explicitly check a box to get it. What is annoying about the current deals that Oracle has for crapware in the Java distribution and Adobe has in the Reader distribution is that they are Opt Out. Unless you explicitly uncheck a box (or two) you are going to get whatever crapware they are offering. And the fact that you need to go though this every time you try to install an update (e.g., to address a security problem) makes it totally unforgivable.

With systems increasingly moving towards locked down app stores and plug-in free browsers it would seem that the market for crapware has peaked. Even Microsoft’s foray into retail has been accompanied by PCs configured with “Microsoft Signature“, thus doing away with crapware. And yet we see VCs continuing to fund crapware installers like InstallMonetizer. It makes one wonder what they see that the rest of us are missing. It makes me hope they lose their investors’ money.

What can Microsoft do to further address the crapware problem? Well for one they could be very careful about any deals they do for search defaults and toolbars, if they are still doing them at all. Personally I’d vote for limiting the deals to search defaults in new PCs and drop installing toolbars (unless a user explicitly downloads them). And I’d kill off use of third-party software distributions to try to install Microsoft offerings (ads and links to Microsoft web pages or the Windows/Windows Phone Stores are a separate and more acceptable solution).

The other things they could do is declare what Oracle and Adobe do with requiring the user to Opt Out of the installation of crapware unacceptable and either block the installers or force the user through a special confirmation process. Besides some technical difficulty determining what is installation of crapware from installation of dependencies (e.g., a library that the primary software is dependent on) legal issues probably stand in the way. Would regulatory authorities consider the user benefit of blocking crapware, or just see this as Microsoft returning to 1990s-type practices that they opposed? I would put money on the latter, which could explain Microsoft inaction on this particular front.

While I hope crapware is on the way out, I think it will be a rather slow demise. It’s a two-step forward one step back kind of movement. Windows 8 introduces an app store, directly distributes Flash integrated into IE, and includes a PDF reader (so you don’t even need to run the Adobe Reader installation and thus risk crapware). But it drops DVD writing support so OEMs will include one from the highest bidder. Repeated security issues lead to recommendations to remove Java from PCs, but for those who don’t remove it every Java security fix also incorporates a crapware distribution. And no doubt OEMs will continue to ship PCs with Java pre-installed because Oracle pays them to do it. As Microsoft grows its own retail outlets it brings Microsoft Signature to more buyers, but OEMs don’t seem to be taking the bait and producing cleaner systems for distribution through other channels.

I hope in five years we’ll be talking about crapware in the context of computing history. But I have my doubts.