Google is Microsoft's New Open Source

Robert writes "Steve Ballmer told investors recently that Microsoft's biggest challenge is embracing software-as-a-service business models, as embodied by rival Google Inc. Investing in software as a service and advertising-supported businesses is a challenge like that which the company faced at the dawn of the open-source movement. To paraphrase him heavily, the takeaway was: Yes, we're investing a lot, but it's riskier, long-term, not to do so. We have a lot of cool stuff coming up and, yes, we are also playing catch-up on a couple of fronts. His speech came a month after Microsoft revealed that its R&D budget for fiscal 2007, which ends mid-2007, would rise to $6.2bn." From the article: "We've got to make this transition, which our industry is making, from software as a product to software as a service ... If you want to be a leading software company, you've got to be a leading software-as-a-service company."

Comments

I'm not renting software

[blueZ3]

from Microsoft or anyone else. I will either use OpenSource software that's free (as in beer) or in cases where I must have some functionality that's only offered in a proprietary package, I'll buy software outright. If the only way to get a particular bit of software is to rent it, I'll go without.

Lots of the software that I use on a daily basis hasn't been updated in years. This is especially true of expensive packages like FrameMaker (5.5.6), Illustrator (v 10) and other software I purchased for consulting work back in the day. I'm not dropping another $600 on FrameMaker for the minimal feature updates (although I hear 7.0 has multiple levels of undo :-> ) though I needed it enough in 2000 that I dropped the cash. (I don't do warez, so that's not an option)

I run Office 2000 (it came "free" with a PC) on my one Windows box, and don't see a compelling reason to upgrade. I certainly won't be paying Redmond a monthly rental fee to run an office suite. I allow Google to display ads, but I'm not paying Google any actual cash and I've pretty much trained myself so that I don't even see the ads anymore. Ballmer & company still don't get it.

Re:Um...their new?

[grammar fascist]

So, their new challenger? Would it be more accurate to say their "additional" challenger?

Nah. Microsoft can't concentrate on more than one opponent at a time.

The funny thing is, I can't tell whether I'm being facetious, either.

Personal use is not the only revenue stream

[bec1948]

Our personal thoughts about Microsoft, Pro or Con, are not that relevant in the larger scheme of things. If we look at Microsoft's total suite of products as a fairly well integrated (and improving) stack of platforms, tools and user interfaces for collaborative work, then the move to Software as a Service is both logical and perhaps ultimately the way everyone will go.

There are some many possible threads here that it's not possible to give a coherent discussion when I'm here at work, but here are some of the ideas that come to mind as an advantage of the concept from a somewhat Microsoft centric perspective:

• Use the same applications on all devices (PCs, Macs, Phones, Game consoles, TVs, IPods, Things that haven't been invented yet)
• For corporations only pay for software that's actually used, non a mass volume license that often includes wasted licenses.
• Access to work from anywhere - Writerly and some of the competitors already offer a form of this
• Smooth integration of multiple data types from almost anywhere into a document. Consider how complex linking content can be when you're doing it relative to your computer and its local (or LAN) storage. Now consider those links in a UDDI/XML/HTML Web

Shortness of time limits clarity on these ideas. Resolving them in our discussions here can be fun, but I think Microsoft should pay us for the privlege. Don't you?

These are all areas where Microsoft can bring a very rich user experience that will drive the competitors to greatly improve their offerings. It will also force Microsoft to be more open and accessible to other vendor's products, solutions and open standards. Resolving all the issues involved will take a long time. I've been involved with these discussions for over a dozen years now. I expect it will take another dozen for these things to work as well as we imagine them to.

There's another point that's been made by others too. Moving from a license per box to a license per use and even mostly free stuff business model will be painful. Look at Novell. One of their biggest revenue problems is that the move to FOSS has occurred more quickly than they expected driving revenues down faster than they'd planned and could adjust for.

Microsoft will feel similar pain, but is learning from all the pioneers how not to get shot in the back. It is what they are best at

Re:Downside!

[StrawberryFrog]

When I have to rent my word processor and spread sheet program.

Software as a service plainly doesn't make sense for word processing or spreadsheets.

But it does for search, or buying books, or news.

The only problem (if you can call it that) is that the users are so not-locked in that it's hard to charge for the service (ok, you can charge for the books, but the users can still go to another online stop at the drop of a hat)