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Ballmer: "We'll Outsmart Open Source"
An anonymous reader writes "Micorosofts Steve Ballmer is spouting off again in this ZDNet UK article. To an audience of Most Valued Professionals in London, he says 'We'll outsmart open source.' Among other things, he also says 'Linux is a serious competitor.' We've known ever since the Halloween Documents that they have been running scared, but this looks like a prelude to a whole new round of dirty tricks. It also looks like damage control for the statements of Microsoft's Sr. VP Brian Valentines last week."
Interesting: they aparently are abandoning their whole total-cost-of-ownership argument. Balmer states, "We cannot price at zero" and "We can't beat them [Linux] on price" - thus implying that Linux's price is zero. Quite the opposite from "it costs you more in the long run!"
Which, of course, will only apply in the USA. The rest of us will be safe, for a while.
Stick Men
There are two main thoughts that run through my mind when I think about competing with Open Source and the IBM model. The first is that, the main problem with competing with Open Source is that it's always faster to copy than to innovate. It may take years, multiple focus groups and millions of dollars to produce feature X or behavior Y in some commercial product but after that it usually takes a fraction of the time for that feature or behavior to be replicated in competing products. This is much compounded by Open Source which is also typically free (as in beer) thus undercutting the original innovators. A good example of this is commercial Unix and Linux.
In such an arena, it seems inevitable that the only way to slow the inexorable march of Open Source is to resort to Intellectual Property. So far no one has done this to any significant degree (the MP3 patents don't count because they are a different issue) although there has at least been discussion amongst Linux kernel hackers about patent liability which will only continue given the proliferation of software patents and the more features that various Open Source projects copy from their proprietary brethren. It is food for thought.
The second thing that comes to mind is that Open Source is shifting the balance of power from software developers to software consultants. For companies like IBM with huge consulting divisions (their Global Services division is at least thrice as large as all of Microsoft) this a great boon which they are willing to sacrifice a lot of software development to gain which explains their intense support of the Linux and Apache projects. To compete with this, I believe large software companies will have to use similar tactics including providing more source code to customers, making more software available free of charge and providing more extensive consulting services. Of course, this would significantly change the landscape of the software industry. Open Source and Linux would indeed have changed the game.
Disclaimer: This post is my opinion and does not reflect the thoughts, strategies, intentions or opinions of my employer.
An exercise for the AC...
... but most estimates put the proportion of all code written in-house at companies other than software vendors at over 75%.
Here are my points:
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OSS doesn't make sense in the reseller market (the one Microsoft is in)
As said previously, why spend millions making software when it's out there for free. If Microsoft makes the best product in the world and sells it for $300 with the source under an open source license, someone will just take the code, maybe modify it a bit, and derive their own product, presumably selling it for less.
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but it makes sense in the support market.
Read.
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Example is Red Hat. No, they're just under being profitable
From Red Hat's website:
"In an increasingly difficult IT environment, Red Hat delivered a profit and generated positive cash flows for the first time," commented Matthew Szulik, President and CEO of Red Hat.
I conceed, I was a touch out of date.
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but they aren't catering to the large market
From Entrepreneur.com:
"Linux was the primary OS for 27 percent of the server operating market at the end of last year"
Again, I'm a little out of date, but 27% is not the kind of market share that Microsoft has (41% from the same website). I phrased "catering to the large market" incorrectly, but I think you get the point.
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I should also add that it's estimated that over 70% of development occurs in-house and not for resale.
From opensource.org:
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Programming will collapse if software has no market value
Very unlikely. Code written for resale is only the tip of the programming iceberg. It used to be said that 85% of all the code in the world was written in-house at banks and insurance companies. This is probably no longer the case
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I know, I know, don't feed the trolls, but I figured that someone asked for links, I might as well offer them for those who show a real interest (and don't have their heads up their asses).
~Dalcius
Rome wasn't burnt in a day.