"If Microsoft is unable to innovate quickly enough, or to adapt
to embrace network-based integration, the threat that it faces is
the erosion of the economic value of software being caused by the
open source software movement. This is not just Linux. Linux is
certainly a threat to Microsoft's less-than-perfect server software
right now (and to its desktop in the not-too-distant future), but
open source software in general, running especially on the Windows
operating system, is a much bigger threat. As the quality of this
software improves, there will be less and less reason to pay for
core software-only assets that have become stylized categories over
the years: Microsoft sells OFFICE (the suite) while people may only
need a small part of Word or a bit of Access. Microsoft sells
WINDOWS (the platform) but a small org might just need a website,
or a fileserver. It no longer fits Microsoft's business model to
have many individual offerings and to innovate with new application
software. Unfortunately, this is exactly where free software excels
and is making inroads. One-size-fits-all, one-app-is-all-you-need,
one-api-and-damn-the-torpedoes has turned out to be an imperfect
strategy for the long haul.
"Digging in against open source commoditization won't work--it
would be like digging in against the Internet, which Microsoft
tried for a while before getting wise. Any move towards cutting off
alternatives by limiting interoperability or integration options
would be fraught with danger, since it would enrage customers,
accelerate the divergence of the open source platform, and have
other undesirable results. Despite this, Microsoft is at risk of
following this path, due to the corporate delusion that goes by
many names: 'better together,' 'unified platform,' and 'integrated
software.' There is false hope in Redmond that these outmoded
approaches to software integration will attract and keep
international markets, governments, academics, and most
importantly, innovators, safely within the Microsoft sphere of
influence. But they won't..."