Microsoft hits new ethical low point?

[smith at missioncriticallinux.com (Jeffry Smith)]

comments inserted inline.

Benjamin Scott said:
> On Mon, 19 Feb 2001, Coutu, Dan wrote:
> > It is very clear that the people at Microsoft, such as Jim Allchin, can no
> > longer see the forest for the trees when it comes to innovation.
> 
>   (This rant was inspired by a comment I saw on LinuxToday.)
> 
>   Microsoft sees Linux as a threat because Linux (or, more correctly, the Open
> Source movement) has the capability to do to Microsoft exactly what Microsoft
> does to other companies: Pull the rug out from under them.  Microsoft does it
> by marketing, strong-arm tactics, corporate purchase, "embrace and extend",
> and outright theft.  Linux does it by making Microsoft's major revenue stream
> obsolete.
> 
>    A traditional product -- say a car -- has a development cost and a
> manufacturing cost.  The price the customer pays covers the manufacturing cost
> plus some extra.  Initially, that "extra" pays for the development.  Once
> development is paid for, the "extra" becomes profit.  With a traditional
> product, the manufacturing cost is significant, so the "extra" is (usually)
> not unreasonable.
> 
>   A software product, on the other hand, has basically zero manufacturing
> cost.  The media, manuals, etc., can be viewed as accessories, or marketing
> materials.  Development is the only significant cost.  Yet, traditional
> software companies, Microsoft included, are built on the idea of selling
> software.  Not software development, but the software itself.

Even better for MS, they push all the manufacturing costs to HP, IBM, Dell, 
etc (i.e. send them a gold disk, and they produce the manuals, installation 
disks, etc).  They even push out the first level support to those companies.  
So development is the only cost.  Yet they market it as a product.

> 
>   That is what the phrase "Intellectual Property" means to the conventional
> software industry -- not just software, but *software you can sell*.  IP which
> you cannot sell is worthless to them; thus they ignore it.  Open Source shifts
> the focus from selling software to selling software development.  So, in one
> sense, Open Source is a very real threat to *their* Intellectual Property, by
> making *their* IP market obsolete.

An equally important message to get across is that we (Open Source) don't 
threaten IP, merely the idea of proprietary software.  IP still exists, but 
it's the IP of "how to fix a problem using tools" not the IP of the tool 
itself.  We're looking to put the "service" into the "service economy" that 
everyone says software is a part of.

> 
>   It was as if, all this time, Ford paid nothing to manufacture the cars they
> sell, and all of a sudden, someone sat up and asked why they had to pay for it
> anyway.
> 
>   I don't blame Microsoft for being scared.  They are looking straight into
> potential oblivion.

Yep, dead in the crosshairs.  Because they only know one business model, and 
Open Source says THAT PARTICULAR business model is dead (but not any of a 
gazillion others).
> 
>   I think we are going to eventually see a lot of software companies start to
> get really nervous about Open Source.  Fighting the common enemy of Microsoft
> (whose publicly stated goal is to *be* the software industry), many
> traditional software companies have not noticed that Linux also threatens
> their own business model.  I doubt many of them will want to throw away their
> own revenue stream.

Unless they change.  I suspect some will.  I suspect some won't.  About the 
same as some of the carriage makers early in this century adapted to making 
car bodies.  Others died fighting the automobile.

> 
>   It will be very interesting to see how it all plays out.

Yes, it will. One other interesting thing to think about (and emphasize to the 
"decisionmakers") is that the software industry employs very few of the 
software folks.  From what I gather, around 80% of the programmers are working 
for traditional companies (manufacturing, insurance, banks, health care, 
government, etc), doing software development / problem fixing for hire.  After 
Open Source, they'll still do exactly the same thing, for exactly the same 
wages, but with expanded tools sets.  For everyone except the traditional 
proprietary software companies, Open Source is a boon.

I also was reading that, in the arguments for the expanded H1B visas, they 
were justifying it by saying that there are around 300,000 software jobs 
unfilled in the US.  So, the 20,000 folks MS employs will have no problem 
finding jobs if MS goes out of business.  Also, if MS goes out of business, 
all the existing MS software will keep working.  All the existing MS 
compatible apps will keep working.  Nothing will mystically die.  Some work 
will need to be done to get stuff onto other systems for the future (although 
less and less every day, as more companies support Linux).  Even better, with 
Open Source, maybe we eliminate / reduce the number of times we solve the same 
problem, so we can do more with less!

The one aspect that will go away if MS goes out of business is MS support (and 
you may insert your favorite MS support joke here).  Now ask, do you want the 
US (or anyone else) to become so dependent on one company that they can 
dictate that they MUST be supported, that they cannot be allowed to die / go 
out of business?

I'm certain the buggy makers in the early part of this century made similar 
arguments.  As did the oil/gas lamp makers, the home spinning industry, the 
(well, you get the picture).  Fighting technological advances has always 
failed in the past.  Your choices (as an individual, company, or country) are 
adapt or die.  Personally, I favor adapting.

jeff
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Jeffry Smith      Technical Sales Consultant     Mission Critical Linux
smith at missioncriticallinux.com   phone:603.930.9739 fax:978.446.9470
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Thought for today:  CHOP /chop/ n. 

 [IRC] See channel op.


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