Microsoft Advised To Learn To Love Linux

mikael writes "ZDnet is reporting that the management guru Clayton Christensen (author of "The Innovator's Dilemma") has advised Microsoft to learn to love Linux. In particular he advises Microsoft to purchase "Research in Motion", otherwise they will see their applications sucked off from the desktop and onto handheld devices such as the Blackberry."

Comments

Article has a flair for the dramatic

[Dante Shamest]

Microsoft's revenues/profits have been positive so far. Maybe they will face "oblivion"...but not in this decade.

Re:Article has a flair for the dramatic

[DaHat]

Agreed, at times people seem to think that Microsoft could just implode one day due to a bad business decision and almost immediately cease to exist.

People seem to forget that if Microsoft were to completely pull out of the Operating System, Office, games and internet markets (and just about everything else) and devote themselves to say... selling sol.exe (Solitaire for the non windows persons) for a dozen different platforms... even without a single sale, the pile of cash they are sitting on, in addition to their assets would be sufficient to keep them afloat for many many years.
--

Re:Article has a flair for the dramatic

[jordandeamattson]

Hi Dante -

What Christen has demonstrated in his research, is that innovative companies have an unfortunate tendency to hold onto their existing business and an unwillingness to "eat their own young".

While this doesn't lead to an immediate collapse, it does impact them negatively and once the downward spiral starts, it can go very fast.

Yours,

Jordan

Re:Article has a flair for the dramatic

[16K Ram Pack]

The trouble with a "pile of cash" is that unless you are paying dividends and/or getting good stock growth, investors will start looking at it.

Re:Article has a flair for the dramatic

[strider44]

That pile of cash can be wittled away very quickly if they aren't just forced to not sell anything, but are forced to fight a losing marketing battle which, again, can get extremely expensive.

None-the-less you're right - Microsoft won't burn in a day.

Re:Article has a flair for the dramatic

[Spoing]

1. The trouble with a "pile of cash" is that unless you are paying dividends and/or getting good stock growth, investors will start looking at it.

Exactly. This is also one of the main reasons for Microsoft and many other companies doing really dumb things for short term gains.

Re:Article has a flair for the dramatic

[Richard W.M. Jones]

People seem to forget that if Microsoft were to completely pull out of the Operating System, Office, games and internet markets (and just about everything else) and devote themselves to say... selling sol.exe (Solitaire for the non windows persons) for a dozen different platforms... even without a single sale, the pile of cash they are sitting on, in addition to their assets would be sufficient to keep them afloat for many many years.

Not true at all. If Microsoft did this, their shareholders would demand the cash pile be given back to them immediately. If they didn't comply, the investors would get rid of the board and install another one with a sensible business plan. Microsoft could well implode under such extreme conditions.

Rich.

Re:Article has a flair for the dramatic

[DenDave]

You may be right. However, just imagine for one second that a serious competitor succeeds in taking over 50% of the desktop market. How much in terms of annual revenue will Microsoft have to "make-up" with alternative business in order to uphold it's credit rating and cashflow? Billions, you are correct in assuming. How easy is it to come up with a business plan that can generate billions within the short to medium run? Not!

Unless you play dirty, and by dirty I mean attempt to gain control of consumer behaviour in a proprietary sense, that is. to proprietarize behaviour that is currently non-propriety.

You have guessed it: entertainement. Microsoft is aware of the potential revenue loss due to encraoching platforms and wishes to maintain revenue by getting control over music and movies and forcing it's proprietary format to maintain billions in revenue..

Re:Article has a flair for the dramatic

[Foofoobar]

Truly fascinating when you consider that they had to cut millions from employee benefits in order to declare a profit last quarter. Speaking as a someone who works across the street from them and whose company depends on them directly for 90% of their business, these guys are bleeding all over the floor. Sure they are an 8,000 lb gorilla but even they are not filled with an unlimited blood supply.

But that's not the problem. The problem is that people in the industry have just seen Linux and Open Source strike that blow and are now realizing that if they ever questioned Microsoft's leadership, they have a new ally... and an ally that has the ability to hurt Microsoft. Camp lines are being drawn and the gorilla is hurt. This is when he's the most dangerous of course.

Of course, OOS and Linux have not yet achieved maturity but they have established unbreakable inroads so even if the gorilla wa able to stave them off, they could not truly reduce the size and interest in it at this point.

Open source effectively checkmates Microsoft's 8000 lb gorilla; Because Microsoft is heavily reliant upon maintaining a shrinking monopoly, they must focus all their energies on keeping it from growing.

The patent wars have already begun and they will wage for probably another 10 years and there is only one obvious way to go and that is a better patent process and the negation of existing patents. This will strike a SERIOUS blow to Microsoft and the best that they can hope for is to influence the process because by this point, supporters of OOS and Linux will effectively have a greater combined strength.

Microsoft's best hope is to entrench themselves in the desktop. As programming evolves, people will be spending far less time making products work together and more time building tools using tools (rather than the raw materials of machine language, etc). As a direct result of this, people will be developing for solely for environments. We already see this now with .NET and LAMP in that people are using tools built to interact with each other and to help them build other tools that can effectively communicate unhindered in a specific environment.

By focusing on the desktop alone (and abandoning the server market), Microsoft can force Linux developers and supporters to focus their attention on the server side and while they fight amongst themselves for dominance, Microsoft can effectively move away from the server market and further entrench themselves in the desktop market/environment and effectively split computer science education into server side development and client side development.

Microsoft DOES need to embrace the inevitable otherwise risk losing it all. But they must also throw out a large enough bone for the open source community to fight over to effectively remove their attention from their combined enemy and allow Microsoft to steal one last toy and make their getaway.

Re:Article has a flair for the dramatic

[mforbes]

You don't say it in so many words, but from your post I get the feeling that you're under the impression that Linux is effecting the total number of copies of Windows sold. I doubt this is true-- the raw number keeps going up. It's the proportion of the market that uses Windows that's going down, if only so slightly yet, as many people switch to Linux. The profits, however, are made on the total number of copies sold, not the market share.

My apologies if that's not what you intended to say. I don't mean this post to be argumentative.

Re:Article has a flair for the dramatic

[swillden]

or through government or business contracts who also get HUGE discounts.

And get even BIGGER discounts if they're smart enough to put a Tux plush toy on the corner of their desk while negotiating.

In the short term, that's perhaps the biggest danger to Microsoft's desktop revenues. Linux may not be making major inroads on the desktop, but it is forcing Microsoft to cut their prices -- sometimes dramatically -- in order to keep from losing market share.

Re:Article has a flair for the dramatic

[HeyLaughingBoy]

True. But other people seem to forget that Microsoft does not exist in a vacuum. If investors see a sudden drop in income with no end in sight, they'll abandon Microsoft in droves. People don't invest in corporations "because it's there;" they do so to make a good return on that investment.

The company itself may stay afloat and pay its bills, but that doesn't matter to anyone except the employees. MS has always positioned itself as a growth company. That's changing, and they know it.

Re:Article has a flair for the dramatic

[_Sprocket_]

It's the proportion of the market that uses Windows that's going down, if only so slightly yet, as many people switch to Linux. The profits, however, are made on the total number of copies sold, not the market share.

Then why do so many people care about market share?

Microsoft's profits on per-unit sales of Windows is debatable. Keep in mind how fluid pricing is for large customers. Also keep in mind what came to light about OEM pricing from "Windows Refund Day" and Microsoft's court battles. The sale of Windows isn't important.

What is important is the USE of Windows. Microsoft needs a (somewhat) homogenous platform that they control. This enables them to push their techical agenda (which in itself isn't a bad thing). Doing this not only enables them to develop technology on their own terms, but it helps ensure its THEIR products being deployed. But it's not the per-unit sale of enterprise applications either. It's licensing. Enter the CAL (Client Access License). A server application that might cost a few thousand may end up generating millions in user licensing.

The key to that money is becoming the gatekeeper. Once one is in such a position, every user is a nominal fee. And those fees add up. If you look at Microsoft's new businesses... from the Xbox to .Net / Passport to DRM... it's all about being the gatekeeper. And to do that, you need people to use your gate.

Re:Article has a flair for the dramatic

[NanoGator]

"Not true at all. If Microsoft did this, their shareholders would demand the cash pile be given back to them immediately. If they didn't comply, the investors would get rid of the board and install another one with a sensible business plan. Microsoft could well implode under such extreme conditions."

Maybe I'm just being stupid because I haven't had my coffee yet, but doesn't the reason about replacing the board with a more sensible business plan imply that MS implosion isn't that real of possibility?

Unpossible

[MadFarmAnimalz]

I almost feel sorry for Microsoft reading this article. He's right, and what's more I'd be surprised if many people at Microsoft didn't know it.

But they can't; how precisely can Microsoft remain a profitable publicly traded company while embracing open source? Their software is all they have.

IBM was in a fortunate position of being a major hardware vendor and therefore capable of switching revenue stream focus.

But Microsoft?

Can anyone else imagine Microsoft five years from now being known more and more as that company that makes really nice mice and peripherals?

Re:Unpossible

[JaredOfEuropa]

But they can't; how precisely can Microsoft remain a profitable publicly traded company while embracing open source? Their software is all they have.

The article suggests that Microsoft should embrace Linux, which has nothing to do with open source. Microsoft could, for instance, create a non-free, closed-source Linux version of Office to take advantage of that slice of the market. The main challenge for Microsoft would be the change in their business model; which is the fact that they can exploit the customers' dependance on Office and Windows to interoperate with other users. To communicate with others in the corporate world, you pretty much need MS. Office. And once you have learned to use that product at work, people naturally use it to work at home as well. And to run MS Office, you'll need Windows: that is what their business depends on.

Re:Unpossible

[Begemot]

Can anyone else imagine Microsoft five years from now being known more and more as that company that makes really nice mice and peripherals?

Wishful thinking.

What about this, this, this, this ... oh well ... this?

Re:Unpossible

[e6003]

It's well known that 90% or more of MS' profit comes from Windows and Office. The other divisions you cite either lose money or just about break even/make a small profit (check MS' annual reports for full details). That profit isn't enough to keep the MS shareholders happy - yet a lot of MS' corporate debt is "hidden" in share options and they need to keep the share price high. A few months ago, MS had a higher market capitalisation (i.e. shares outstanding times share price) than IBM but which would you rather have your pension fund invested in?

What this love will consist of

[DrXym]

Half-baked port of .NET to Linux w/ large licence costs. Half-baked port of various network management protocols such as WBEM, to allow Linux to be a node in network managed by XP. Re-animated mouldy, half-baked IE for Unix. New 'Services for Linux', half-baked Linux layer for NT. Ad Nauseum.

All of the above will receive scant support and will be axed after one release. A MS spokesman will cite 'no interest' for the reason even though the half-baked, shitty software and uncertain future has more to do with it.

Early days yet

[delta_avi_delta]

While I think this is encouraging, I feel that it's a little alarmist: Microsoft still have an incredible monopoly. Of you non-techie friends (if you have any unconverted) how many *don't* run Windows? How many are terrified by the prospect of having to learn something other than Windows? How many think that Windows, OfficeXP, IE, and Outlook are the only applications they need, apart from games, which lets face it, are mostly written for Windows.

I think Microsoft would have to play a lot of consecutive bad hands before they'll cede their desktop stranglehold.

Re:Early days yet

[Alomex]

While I think this is encouraging, I feel that it's a little alarmist: Microsoft still have an incredible monopoly. Of you non-techie friends (if you have any unconverted) how many *don't* run Windows?

Disruptive technologies creep on you very fast. One day they are laggards offering much inferior products and competing against well established monopolies, and then a few years later the old monopoly is gone and the new technology has taken over.

All your comments above applied equally to IBM. They had an incredible monopoly and you would have been hard pressed to find a non-IBM shop in the mid-80s. Yet here we are, twenty years later with Micrsoft being the dominant monopoly.

Lessons from history

[e6003]

History is full of companies who fell out of the limelight because they couldn't or wouldn't adapt to new technology. One is happening right now as Kodak struggles to remain relevant in the world of digital photography (and it seems to me, they are trying to earn money from "traditional" photographic services such as printing, applied to digital photography - I'm not sure this will be successful). Where are all the typewriter manufacturers in a world of word processing? Despite the FUD and lock-in tactics (tactics that are becoming less and less successful with each iteration IMO), the same fate awaits Microsoft it they refuse to adapt. In contrast, look at IBM - in hibernation throughout much of the 1990s but emerging ready to do business with open source - and that's just one example of how they've adapted over the course of their history. Gates and Ballmer would do well to study this.

Re:Obvious, thanks a lot

[Anonymous Coward]

MS needs a competitor they can point to and say "see, we're not a monopoly". Apple has done this "service" for years, and I see them continuing to do so as long as MS has any fear from monopoly proceedings (and as long as MS Office pays its way and then some).

Re:Extremely interesting...

[HBI]

If Office were on Linux I could port all my end users to Linux without issue.

OOO /Star/Koffice/whatever just aren't good enough to prevent the person proposing the change losing their job once the end users have trouble interoperating with Windows clients. If it's Office, just blame Microsoft and keep your job.

And yes, I would keep a copy to stop from having to dual boot like I do now.

Re:Extremely interesting...

[Gandalfar]

Lots of users would use MS Office because they're lazy and they know how to use it.

Re:Two bits

[julesh]

That's not how they'd do it. They'd buy out somebody else already in the game -- that's how MS enters new markets.

Re:Extremely interesting...

[prescot6]

If Office were on Linux I could port all my end users to Linux without issue.

I completely agree. Think about everything that your average user uses their computer for. You get internet/email and office, and a couple other programs such as Quicken... and games.

If you have Office, it makes it so much easier for the user because instead of having to learn ALL new programs, they just have to use a different internet browser.

Re: Extremely interesting...

[gidds]

Actually, the point is: how many Linux users would buy Office?

Even in the Windows world, where users are used to paying exorbitant fees for software, Office would still be in trouble without OEM deals, bundling, and other reductions. Without those, and in a market used to getting software for free, the prospects can't look good...

I bet Microsoft has now seen the light.

[Anonymous Coward]

After all, a harvard business professor told Microsoft that he obviously knows their business better than the 2000 harvard business MBAs that work at Microsoft building business plans and schemes.

I bet that Microsoft had never thought about that before. Now all they need to do is weigh the advantages and disadvantages against each other. Since this "Management Guru" from Harvard says that this is the correct choice, they'll need something as big as a 50 mile wide asteroid striking Redmond to level the scale out again.

Maybe it's possible that the most sucessful computer marketing machine in history has a few bright minds deciding how best to sell their products which apparently only managed to dominate like 90% of the entire world wide market against an amazing number of competitors as different times.

I would say that from my experience, there's a good chance that Microsoft has ported most of the Windows apps using software like MainWin, but there's no reason to release them. They more than likely already have a solid business model laid out.

Re:Extremely interesting...

[kasperd]

do you actually think that anybody in the Slashdot community would use Office if it were ported over to Linux?

Too late for me. I would have liked to use Microsoft Office ten years ago, but there was no version for AmigaOS. I probably couldn't have afforded it anyway, the price was pretty high for a highschool student. At the university using LaTeX was a requirement for some of our exercises. I still use LaTeX and is satisified with it. Plaintext works well with version control systems, and you don't have to deal with corrupt files in binary formats.

Re: Not Adapting?

[Hassman]

But aren't they adapting? Here are some of their major complaints:

1) Criticized of security problems
-- Put a team of developers on making XP more secure. Release SP2 with focus on security. It isn't perfect, and there are still flaws, but they are listening to the critics and working on the public's number 1 concern. I believe we'll see Longhorn as a very secure. Does that mean it will be full-proof? No, that would be impossible, but I do think that it will be much, much better. After all, Linux has security problems. Mozilla has security problems. They just don't get as much attention and are fixed slightly quicker.

Look for this as the number 1 improvement in the coming months / years.

2) Product Quality
-- In the past MS has sacrificed security and to some extent quality for ease of use. I think they will still but ease of use as a top priority, but look to see the quality level increase. They have already delayed Longhorn and cut feature in order to really nail down the important ones.

It is very hypocritical to read here how people blast MS for their quality problems and then blast them again for delaying a future product in order to enhance the quality. I just don't get that.

3) This article talks about apps being sucked away
-- I fail to see this. It will happen to some extent. That is inevitable. MS can't do everything (nor do I or anyone else want them to). So they have to pick and choose.

So let's take a look at a few things they have done:
- MSN - recognized the AOL threat and jumped in to compete
- online music - recognized a growth opportunity so they are now competing with iTunes
- XBox - jumping into the home gaming / entertainment center market

Again, note the hypocrisy. Blast MS for being a monopoly. Blast them for not adapting to the business market...effectively losing market share. So what do you want? A monopoly or a competitor?

To me MS screams adaptation. Maybe I just don't get it. Maybe I'm just a little dense. Or maybe people just love to hate MS...no matter what.

Before I get modded down let me also say that I'm not advocating MS. There are many, many superior products on the market than theirs and I urge everyone to use the better products. After all, why not use the best? I'm just trying to point out the hypocrisy.

Re:Two bits

[afd8856]

What kind of a f* moron finds this interesting? Who believes that bogus page on MSLinux as proof that Microsoft has a Linux distribution? Who, in their right mind, thinks that DRM needs a kernel driver to function? DRM in a specific application... Hey guys! PDFs also embed DRM information... shouldn't we have by now some PDF-loading kernel module?

Idiot...

Re:Extremely interesting...

[skiman1979]

If Office were on Linux I could port all my end users to Linux without issue.

If MS Office was ported to Linux, do you think it would operate in the same way? With the same features? I've seen other applications ported from Windows to Linux and the Linux version did not have nearly the same capabilities. For example, IM clients like AIM and Yahoo Messenger. The Linux ports of those apps are a bit different from the Windows versions. They may have less bugs (perhaps), but the application itself has a different interface. If MS Office were ported, I can see the same thing happening. MS ports a watered-down, ugly version of MS Office to Linux so they can say "See, Linux isn't so great." If the Linux port of Office isn't exactly the same as the Windows port, Windows users won't so easily switch.

Why

[suezz]

why waste the breath on microsoft - Billy and Steven are going to do what they want to do rather people like it or not - I personally think microsoft is going way of cable companies except they are going to take it further by providing end devices in the house that either connect to fiber/cable/or dsl. they have been working with a major telecom giant in getting fiber to premis - bet ya you can only have microsoft products to use it. this is where they are going next and they will put in writing with the companies they contract with that they don't work with linux. so I think we should all save our breath and quit trying to tell Billy and Steven what to do.

Re:Extremely interesting...

[shutdown -p now]

If you have Office, it makes it so much easier for the user because instead of having to learn ALL new programs, they just have to use a different internet browser.

Don't be so naive. If Office is ever ported, it will be ported with IE, ActiveX, VBScript and all other goodness.

Re:Extremely interesting...

[arendjr]

But then again, currently Linux is slowly eating into Windows' market share. Right now for about every lost Windows user they also loose an Office (which earns them more than Windows) user. Currently, Office is a very strong instrument in keeping the Windows monopoly intact, but if Windows looses out too much it will also undercut Office. So porting Office to Linux could at least keep their Office monopoly intact a bit longer. So it may not be a matter of attracting potential customers that much as it will be about keeping their existing customers.

Re:Extremely interesting...

[HBI]

Let's bring over the Excel spreadsheet with the clunky macros written in VBA format that they use for payroll.

How about a powerpoint with multi-megabyte embedded graphics. Will the layout be identical? I can tell you now - no.

How about that Access database they use in HR to keep track of some absolutely vital bullshit that I have no idea about...what about that?

RTFB

[mangu]

If you read Christensen's fine book, you'll see that Microsoft is acting *exactly* as predicted. So did all the other companies mentioned in "The Innovator's Dilemma". And that's what makes it a dilemma. Why should a company abandon its business to start on another, apparently less lucrative line, which offers less utility to the company's clients?

Well, Christensen argues, according to many examples in many fields, ranging from excavating equipment to department stores, the new businesses, despite being apparently inferior in some ways, will end in dominating the whole field. That happens because the new way of doing business will evolve faster than the old, established way. Why evolve, if it's the best and most lucrative way? And, when the old managers wake up, it's too late.

Re: Extremely interesting...

[SvendTofte]

The target group for any MS Office for Linux would be used to paying. The largest group is the corporate sector, where having your licenses in order is actually the norm, then not. How it fares for homeusers is something else. Some people do buy Office standalone, others pirate it, others can get it through their Office (that deal where you can install it on your home PC).

If Office for Linux was out, I'd bet good money it would sell well.

Stop helping the beast.

[vettemph]

Please don't give microsoft any survival tips.
signed,
A guy who does not miss macro viruses. (or any viruses for that matter.)

Re:The Blackberry is not a Linux device

[Alomex]

For writing letters, you really want to have a decent keyboard, and for spreadsheets, something that is larger than a 5" screen is probably a very good idea as well.

Now you are making the same mistake as DEC and other such companies described by Clayton in his book: "how could the PC ever replace mainframes? it doesn't have enough memory, it has no access to tapes where all the data resides" etc.

The mistake you are making is that you are comparing today's incarnation of an ascending technology (blackberry) with a highly mature platform (PC). By the time the blackberry has gone through a few iterations it will come with holographic keyboard and retina-projection screen.

Re: Not Adapting?

[e6003]

I mean, not adapting as in sticking to the model of proprietary software that may have served them well for 15 years, but is now becoming unmanageable. You cite the security issues and the steps they are taking to address them - I think this is a symptom of a much bigger problem, namely that Windows is now too big a project to manage in house. CPU power doubles every 18-24 months (a la Moore's Law) and that means your software has to increase in complexity to take full advantage of it - distributing this workload is one of the chief advantages of the open source model. IMO the delays to and feature losses from Longhorn are a symptom of the same problem.

Re:Extremely interesting...

[16K Ram Pack]

I work in the "business world". And for 6 months, I have written everything in OpenOffice.org. And I'd rather send everything in PDF because fonts will be preserved, and there's less chance of someone altering it.

Re:Two bits

[Alomex]

MS Linux exists, and has existed, for a while. It'll appear whenever there's a business need for it.

You really need to read Clayton Christensen's book. In it he describes how the old technology company keeps on asking its customers "do you need this new technology (e.g. Linux)" and the customers keep on saying no, we don't, because the new technology is so disruptive that it comes with its own set of customers.

For example while M$ is busy asking corporate IT if they want Linux and OpenOffice instead of WinXP and MS Office, and they keep on hearing that no, they don't.

Meanwhile average joe blow keeps on buying RIM blacberry's at a rate of a million per quarter, and suddenly you have a widely deployed platform. And yes, it turns out joe blow does want Linux and OpenOffice in his blackberry.

So the "business need" never arose. M$ customers never asked for it. It was the non-customers who took over.

Both your comment and the article are correct

[Anonymous Coward]

None-the-less you're right - Microsoft won't burn in a day.

You're completely right. Wars take a long time. Decisive battles are rather quick, and they often aren't recognized for what they were immediately. Open source won't and can't kill Microsoft tomorrow. If MS makes the right decisions, open source may never kill it. However, Windows and MS Office can't last forever. Whether their eventual demise is a serious blow to MS or not depends partly on the timing and nature of the transition from them. Microsoft can change that to some degree. More importantly, Microsoft can determine what other markets it will already be in or pursuing on the day that battle happens. If they lost 100% of their Office revenue permanently inside a month's time, it might be only a mosquito bite to them depending on where most of their revenue is coming from when it happens.

Re:Both your comment and the article are correct

[HiThere]

Ah, but how long do they have? That's the unanswerable question.

And it doesn't even matter what most people have on their computers. Most people will never install an operating system. Most people will never purchase an operating system. Most people will never purchase a Word Processor. So what matters to MS is what the computer comes with. So far MS is nearly unchallenged in this area, but that could change VERY quickly.

Fortunately for those of us who prefer something else, we aren't the major enemy of MS. They are their own worst enemy, but next to that it's the threat of rebellious customers. And in this case it's not the end-user, but the company that forks over the cash to MS. HP, Dell, ... those guys.

Re:How to kill Linux MS Style.

[Chaotic Evil Cleric]

If it's GPLed, we'd just fix it. Java's closed and therefore unfixable by us. If MS made a linux distro, we'd just take the MS GUI and drop in our stock kernel, etc. and end up with something even grandma could love.

Microsoft can't "Microsoft" something that they don't completely control.

Re:Extremely interesting...

[ahfoo]

Id' say that is the real problem for MS right there. Most businesses don't use the latest version of Word. Not only that, a huge number aren't using the latest version of the OS either. They're already their own biggest competition. That's a real problem.
This is the squeeze play problem and its a very serious problem from a business perspective. For the lazy, if-it-aint-broke-don't-fix-it crowd you've got this unwillingness to upgrade. Then on the other side you've got the geeks who want the latest toys and love to tweak everything. Hmm, already lost them to Open Source. So, they're stuck in the middle trying to sound innovative and yet unable to change too much. The only guaranteed clients are those that are somehow forced to buy the product or those who aren't too concerned about IT budgets. In times of growth, the latter can be found in adbundance if you market your upgrade as the safe thing to do. But growth is patchy these days.
Business wise, where they're at is not a good place to be right now.

Re:Two bits

[BigGerman]

why exactly would they need "a non-GPL applications layer"?
GPL in Linux only applies to the modifications to OS itself. Tons of companies release commercial soft for Linux: Oracle, BEA, ... Nothing prevents MS from releasing Office for Linux if and when they decide it is good thing to do market-wise.
And it would not be hard technically because the y produce native ports of their soft to OS X every day.

A Windows desktop and apps for Linux

[FridayBob]

I've said it before and I'll say it again. If people are so willing to shell out all that extra money for Apple's GUI on top of an open source operating system (Darwin), why wouldn't they be willing to pay something extra for a system that runs a Windows desktop and applications on top of Linux? They'd have the speed, reliability and security of Linux, together with that good ol' Windows look and feel that we all know and love (cough).

Seriously, though: if Apple can do it, there's no reason Microsoft can't. If they wait too long, there is indeed a danger that the open source community will, slowly but surely, end up pulling a Netscape on them (oh, the irony). However, if they act soon enough, I can even imagine them retaining a bit of their current monopoly (apps that don't work without the MS desktop).

Re:Two bits

[Maul]

Is it plausible that some Microsoft people have been experimenting with Linux to the point of even looking into making their own distro in the future? Sure.

Is it likely that they have a distribution that is release worthy just sitting on the shelf? I highly doubt it.

in a nutshell

[cabazorro]

To put it succintly.
Linux is to Microsoft today
what Microsoft was to IBM/OS in the 80's:

A cheap low quality alternative.

Seems fate is not without a sense of irony.

Different perspective

[einhverfr]

Agreed, at times people seem to think that Microsoft could just implode one day due to a bad business decision and almost immediately cease to exist.

I think that Microsoft *as we know it* could implode one day doe to a bad business decision. Does this mean that they will still be making software? Don't know....

People seem to forget that if Microsoft were to completely pull out of the Operating System, Office, games and internet markets (and just about everything else) and devote themselves to say... selling sol.exe (Solitaire for the non windows persons) for a dozen different platforms... even without a single sale, the pile of cash they are sitting on, in addition to their assets would be sufficient to keep them afloat for many many years.

The business has decided to give away a large portion of its cash pile to its stockholders in the form of a buyback program and a huge dividend.

That is not to say that Microsoft could not sustain their operations for a long time via debt financing...

Now, the software suffers from an extreme economy of scale (variable costs are very low, fixed costs are very high), so if sales of Windows start to fall, it impact's Microsoft's budget really fast. THey are still forecasting something like 6% growth next year. But what happens if they end up losing market share to Linux? They can afford to cut prices *now* without endangering their operations, but if they lose market share this will not necessarily be the case.

Microsoft is under attack from multiple angles from rapidly maturing and credible compeition: OpenOffice, Linux, etc. These programs threaten their conjoined twin cash cows of Windows and Office. And if they can get 30% of the market (assuming no market growth), they will render Windows and Office unprofitable at current prices and budgets. Even half that would cut their profit by 50%. Now if the market grows those numbers grow with it, of course. At that point, Microsoft can either increase prices (damage their competitivity) or cut costs (pay programmers less and spend less on marketing, thus damaging their competitivity).

At this point, I do not see a long-term future for Windows in the face of Linux. And by the time Longhorn ships, we may be at a critical point.

Strategy

[SamMichaels]

Perhaps they're realizing that they should listen to the old saying:

Keep your friends close, but your enemies closer.

Listen to your customers--no don't--no do

[dpbsmith]

Available candidates:

Christensen tells you not to listen to your customers too much.

Drucker says that above all you must listen to your customers.

Peters says you must have a corporate culture in place and it's more important that you follow the values of the corporate culture than what those values happen to be.

I'm afraid I don't remember the name of the current that stress how vital it is to deliberately piss off and drive away the customers that are costing you money (e.g. by asking for tech support)...

Whatever you feel like doing with your customers, you can find a management "expert" to back you up.

Re:Extremely interesting...

[mdfst13]

"you should have an IT-user-whatever (user service/support) which should do that job for you."

No, no. You *had* someone who did that for you. Then they left. Now, you just have someone who sort of knows how to make little changes but has no real idea of how things work. Most software like this is just one big kludge. Of course, that's the Wrong (TM) way to do it, but it's also the way that they are doing it.

So long as the switching costs are (perceived) higher than the current Microsoft tax, they will keep paying Microsoft.

Dvorak Out Of Touch

[MooseByte]

"John Dvorak put it better than I could when he wrote a piece ome time back"

I disagree - that link sounds like more of Dvorak talking out his ass again. Example:

"The closest Christensen comes to a real disruptive technology is digital photography. But it was invented in 1972 and has never been "cheaper" than film."

In what universe? The Land That Time Forgot? My digital camera saved me more than the cost of the camera itself within 6 months of purchasing it! The cost of a 36-exposure roll of film + development really adds up fast.

And that doesn't even factor in the cost advantage of being able to review a shot immediately to know if that rare family reunion pic actually turned out. Not only is digital definitively cheaper in raw dollars, it's far cheaper in terms of recovering from lost/failed photo ops.

Frankly Dvorak has sounded like a tired worn-out gasbag of punditry for over a decade. Maybe two decades - I'll have to check my back-issues of Computer Edge. ;-)

Re:Extremely interesting...

[gadget junkie]

" If Office were on Linux I could port all my end users to Linux without issue."

That's why Microsoft MUST make every program as monolithic as it can, in spite of all techical evidence that an opposite way would be simpler and cost effective.
...The trouble is programming costs are just too small in relation to revenue; this means that cutting programming costs by 5 % wouldn't be appreciated, whilst programming with a view to tie customers to the cash cow (office) is far more effective. It also sells better in Wall Street, where the honchos' stock must go up to make them rich.

I recall, but you guys can help me there, that at the time of the first monopoly suit there was talk about splitting MS into "operating systems" and "applications", with everything in the operating system adequately documented. where would be open office now?

Re:REALITY CHECK

[16K Ram Pack]

And what's the current P/E ratio?

So, they made 8.6bn profit on a share value of over 300Bn? Thats less than a 3% return on investment. People who invest look at 2 things - dividends and share growth.

If Microsoft don't deliver on these things, shareholders will want their pound of flesh or will go where they think they can get a better return.

It doesn't take much for that pile of cash to get eaten up with shareholders taking it.

I'm not saying it's going to happen tomorrow, but things could be very different in say 10 years.