Microsoft's open source opportunity

by Matt Asay

I have been arguing for years that Microsoft, perhaps more than any other company, has much to gain from open source. Think about it. Windows is the world's biggest platform, especially when you measure it across the server, desktop, and mobile environments.

While I'm not a fan of some of the company's moves, I firmly believe that there is a growing force within Microsoft that wants to figure out "this open source thing."

The company is starting to get it, after years of marketing FUD and other wasteful responses. With the most popular open source software - SugarCRM, Alfresco, Zend, MySQL, JBoss, etc - running on or with Windows (over 50% of the time, in many cases), it makes sense for Microsoft to support this new category (open source) into its ecosystem.

In this opportunity, however, lies Microsoft's biggest roadblock. It's a massive platform company and, as such, needs to be neutral to positive toward all players that enrich its platform with their applications. But Microsoft is also an applications company, with a growing database business, exploding Sharepoint business, and an already gargantuan Office business. Yes, Windows competes with Linux. But I believe Microsoft's biggest opportunity is above the operating system, and this is where it bumps into a range of open source (and proprietary) businesses.

Josh Greenbaum of ZDNet concurs:
Microsoft, always interested in being the center of the IT universe, has realized that the carrot is just as good, if not better, than the stick. Remember the key component of an ecosystem strategy -- to paraphrase an old Ann Landers column on whether a husband is considered a philanderer if he looks at another woman -- it doesn't matter where a customer works up an appetite as long as they come home to Microsoft's technology to eat. So what if a customer is using Linux, Java, Business Objects, or something from Software AG (whatever) as long as the main platform comes from Redmond.

This is yet another example of how smart...Microsoft has become in a market where its traditional monopolies are more and more threatened. I would argue that, done rightly, being the owner of a software ecosystem could be even a better deal than just bludgening the market with monopolistic practices.
So far, Microsoft has done a good job of working with open source companies - even competitive ones - to facilitate their integration with Windows, SQL Server, etc. And so it should. The question will be whether it can continue to do so.

In short, the billion-dollar question is whether Microsoft can continue to view itself as a platform company. To the extent that it does, open source is an opportunity, not a threat.


M. David Peterson
2007-02-01 21:18:37
Nice article, Matt! I think you've nailed it right on the head. In fact, if you look back at MSFT's history, it seems to me that what you will find is a very similar pattern in how they go about business...

Get the channel involved,

- 10 years ago the channel had nothing to do with OSS.
- Today, it most certainly does.

To see MSFT take this overall attitude towards OSS is surprising in some regards, but in the end, it's the channel that matters, and today's channel is filled with OSS companies who are working to deliver complete solutions to their customers. In other words, from one perspective, this is most certainly not business as usual for the Redmond behemoth. Yet from another perspective, it most certainly is.

2007-02-02 11:55:24
I think Microsoft has to be careful how it approaches open source though. I think some of the people that you speak of within Microsoft trying to figure out open source are having their ideas and ideals funneled through the same old people and the same old business model.

I think a perfect example of this is the shady deal between Microsoft and Novell last Fall. Sure it has the professed intent to increase interoperability. I'm sure Novell wanted to differentiate itself in the linux world. However, Steve Ballmer continues to have the audacity to continue to try to cast a shadow on linux with his dribble about their intellectual property being in linux. The only reason they haven't come forward with it is because the threat is more effective than the truth - fear, uncertainty, and doubt plain and simple. There is no substance to their claims or they would have used that much much earlier in the game when they were much more paranoid.

I think Microsoft might have an opportunity with open source and they are trying to profit from it, but I don't think that they will make any friends or headway at all in the open source world with Steve Ballmer and those with similar thinking at the helm. They may have different spin on things, but the net result is the same and that's all they care about.

2007-02-03 20:47:23
Good lord, what a bunch of shills. Proof that money can buy anyone- did you all get a good price for posting on this sponsored blog? This is sickening. Maybe someone will grow some ethics and post some truth here.