Too little, too late?
The question is, did Microsoft act too late? In just the past year, many companies have found that open-source software has gained a level of sophistication that makes it a viable alternative to Windows for server systems and Web site operations. Amazon.com, Verizon Communications and Air New Zealand have all switched to Linux over the past 12 months to cut costs.
Initially, Linux was seen as a competitor to Windows only for server operating systems, used by roughly 27 percent of corporate servers and more than half of all Web servers, according to industry researcher IDC. Recent moves, however, have begun to strengthen Linux's appeal in desktop PCs when combined with open-source alternatives to Microsoft's Office, such as Sun Microsystem's StarOffice.
That's leading some longtime Microsoft customers to the next, once-unthinkable step: serious consideration of Linux and other open-source software as a replacement for Windows and Office on their desktop systems.
Satish Mahajan, chief information officer of American Automobile Association, is evaluating Linux for his server systems and beginning to eye the open-source software for his desktops as well. "When I talk to my colleagues, I hear more and more willingness to move a portion of their businesses to Linux. I'm still weighing the pluses and minuses, but it has moved up on my scale," he said.
Mahajan and others say cost is only one reason for the decision to evaluate Linux. In Microsoft's modern world, its products are seen by a growing body of corporate technology managers and even some of the world's governments as inflexible, expensive and bloated. Large companies and public agencies--some of Microsoft's best customers--are weighing Linux and open source to simplify their operations and get off the update-replace treadmill long prevalent in the computer business.
Microsoft executives acknowledge the rising threat but, mindful of the popularity of Linux and open source among their customers, have tempered their comments.
"We need to take a balanced tone," said Microsoft's Veghte, the man assigned by CEO Steve Ballmer to come up with a competitive strategy toward Linux. "No matter how you look at it, Linux is a huge competitor and isn't going to go away."
Still, Ballmer--never known to mince words--is quick to point out where he sees Linux lacking. "The Linux client hardly runs any applications except a bunch of shareware stuff that's not very good," he said. "There has yet to be any innovation, new features, new capabilities out of the Linux platform.
"First they cloned Unix, and there are people working on cloning some of our stuff. But it's just a cloning OS. I don't think anyone should expect anything innovative coming out of that world," said Ballmer.
The most difficult part of this competition is one of simple economics: Linux and other open-source technologies are licensed for free. That's where Microsoft can't compete, a point Ballmer willingly concedes. As Ballmer said at a recent conference in London, "We cannot price at zero, so we need to justify our posture and pricing."
But Ballmer thinks price is only one reason why companies are considering Linux. "People are going to look at Linux, whether our stuff costs US$5, US$50 or US$100. So we have to work that value proposition every day."
Numbers cause concern
In a recent survey of 225 chief information officers, 29 percent said they owned Linux servers and 8 percent are formally considering buying them. More troubling for Microsoft, 31 percent of those who recently purchased a new Linux server used it to replace a server running Windows.
Many technology managers cite the controversy over Microsoft's new licensing plan in their reasoning.
"We're looking at Linux as a less expensive alternative to Windows and Office," said Alan Flint, systems applications manager at Richmond Wholesale, a food distributor in the US. "I'm looking for more simplification in my environment because I'm displeased with Microsoft's licensing programs."
Mahajan said Microsoft's licensing plan is also driving him to take a closer look at Linux. "The cost of Microsoft's software continues to increase and change from the old days, where you could buy Windows 98 and keep it for three years. That's not an option anymore. You have to pay."
Utah's Windley agrees, saying the new plan "just makes people more leery" of Microsoft. "I've got a whole group of IT workers in this state who are tired of the licensing headaches with Microsoft. They want OpenOffice (an open-source version of Sun's StarOffice) just to do away with the headaches."
Flint sees another trend driving large companies away from Microsoft: the company's practice of issuing frequent upgrades and new versions of its products, often ahead of its customers' willingness to buy those products. "Microsoft wants to lock in their revenue by having customers tied to subscriptions. I think they are changing their licensing because there aren't many features that users are clamoring for."
Cherry of Directions on Microsoft said these comments are echoed throughout the industry as technology buyers are much more price-conscious than they were in the 1980s and 1990s. "Linux is becoming more of a threat because customers used to be a lot less sensitive. Whether it was money or whether each version of Windows had enough compelling features, they were willing to upgrade even if it cost them more hardware," he said.
"Now they look at something like Windows XP and say, 'OK, it's more stable, but I have to buy new machines. I don't think Microsoft has ever made a version of its products that used less resources than the previous version.' Or, 'Windows 2000 Server looks really good, but all I need is a Web site, and I can take this old 486 and I can put Red Hat Linux and Apache on it and have a Web server up in no time at all,'" Cherry said.
No Freedom here.
Microsoft is not offering any code as Open Source. Not even close.
What Microsoft has discovered is that it cannot defeat Open Source as a concept or a practice, so it is trying desperately to co-opt the language and terminology of Open Source, and twist it to its own needs.
Here's how Open Source is different to what Microsoft's offers:
- Open source provides the right to re-use, extend and re-distribute. Microsoft does not.
- Open source allows for independent review, and comment of all system and application software, without the need to sign onerous NDAs. Microsoft does not.
- Open source means the allocation of rights and freedoms to users. Microsoft provides nothing here. Read the EULA and the contracts for their bogus 'shared source' programme. The only rights they affirm are their own, not yours. All your rights, often even your rights to comment on defficiencies in the software, or to use the software with other components, are voided.
- Further, by releasing your code modifications in an open source licence such as the GPL (the most popular open source licence) you guarantee that your code cannot be on co-opted, and that it will always be available for others to view, learn from, share and use. With Microsoft, all your hard work will only eventually benefit Micrsooft. You want access to your contribution in the next version of their software? Well, keep paying.
Microsoft will succumb to the un-stoppable rise of Open Source. There's no doubt here.
Much like IBM had to change its monopolistic and heavy handed ways after decades of industry dominance, so too will Microsoft. And the hope is, that much like IBM, one day Microsoft will become a fer better vendor, and a an asset to the IY industry, rather than what it is now.