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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."
We have now found the perfect slashdot headline.
All the key memes are there.
We need continue no longer.
Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
Microsoft has real competition, forcing them to develop better, more competitive software. Downside?
The downside for Microsoft is that they are their own worst enemy. People already pay Microsoft for their software (either embedded in the cost of a PC or at the store for things like Office) . Now Microsoft is in the tough position of getting people to transition from paying for software upfront to paying for it as a service without people realizing they are getting the short end of the stick. This will be much easier with things like office and other products you typically buy in the store. For things like windows, it will be hard to convince people that they need to pay monthly to use their PCs after they have already paid up front for the hardware and OS. Of Microsoft makes it too painless, they shoot themselves in the foot by not making as much as they could. If they make it too painful, they stand to lose marketshare, especially if companies like Novell and IBM come out and really pump the idea that you don't have to pay to keep your Linux machines running.
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.
:-> ) though I needed it enough in 2000 that I dropped the cash. (I don't do warez, so that's not an option)
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
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.
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No real difference and I think both are fine. You want to pay $x per song and own it forever, you can. You want to pay $x per month for unlimited use (but stops when you stop paying), you can. Choice is good.
That said I personally like the software as a service model less than the music model. At least with the music you are constantly getting new material for the monthly price where software is (more or less) just paying for the exact same thing again and again. But thats just me and even in those cases depending on the monthly cost to "rent" vs the cost to "buy" it could still be a good deal. Anyway, I'm always glad to see more choices even it I don't happen to like one of them. Someone else might really like the other choice for some reason and I'm glad its available to them.
"reality has a well-known liberal bias" - Steven Colbert
Downside?
The competition is an illusion.
Google exists in an entirely different sphere of influence than Microsoft. Microsoft is not protecting its base against competition so much as it is doing what it has always done:
Found out that someone else is making money and trying to muscle in on it.
Microsoft is in the software business. Google is not in the software as service business. They are in the advertising business, just as a billboard company is not in the real estate business, even though they must interact with the real estate market in order to sell their advertising product.
And the only people demanding "software as a service" are the advertising buyers/sellers.
KFG
The problem will arise when the only choice left is the service model. It's not good for the customers.
A hammer is not a "service." A paintbrush is not a "service." A car is not a "service." They are tools. And, unless people use them very infrequently, people don't rent their tools. They buy them so that they may own them. Software follows this analogy to a very high degree. Software is a tool and, as such, the market for "rented" tools is way way smaller than the pundits are predicting. This will become even more true as Open Source solutions continue to make inroads and force aside overpriced proprietary solutions that are buggier and offer almost no extra compelling functionality.
Microsoft does know how to Pwnz0r and expand existing markets but, so far, they have largely failed to create new ones. Software-as-a-service is a dead end, especially for a company the size of Microsoft.
Schwab
Editor, A1-AAA AmeriCaptions