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IT-Analysis: Microsoft Windows - the Gates left open

Feb 21, 2000, 17:14 (5 Talkback[s])
(Other stories by Cheshire Cat)

"Microsoft has been quick to backtrack from claims by a certain W. Gates that the company is prepared to open up the Windows source, if it would prevent the break-up of the company. Is this the kind of innovative idea that Uncle Bill wanted to focus on, when he resigned as head of the software giant?"

"Open source Windows is a logical development as it equates to the rising tide of commoditisation in software. Mobile phone users would not expect to pay extra for the software that runs on the phone; rather, there are a certain set of expected facilities that are delivered with any device, and the OS is one of them. Traditionally, we have paid for PC operating systems and (grudgingly) upgrades, but as products like WebPads from Samsung and Diamond illustrate, the line between PCs and other devices is diminishing and so must the pricing models. It is a fact that Linux is being chosen as an embedded operating system for a wide variety of devices, from video recorders to the aforementioned WebPads, because it does not incur software licensing costs. Microsoft knows that it can only really establish itself in the device-driven market if it cuts its licensing fee structure to the bone, or if it drops it altogether.

Microsoft is in a quandary as it grows out from its desktop PC home ground. As it moves upward into the server space, where premiums are currently higher, is risks incurring the wrath of its user base due to the higher licensing costs it is demanding. Downward, the company's success in the device space is dependent on it making the product much cheaper, or even free. This "Open-Windows" thing may solve these problems, by enabling the company to concentrate more on applications and services, but may also cause some problems of its own. Either way, it is an issue that is unlikely to go away."

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