An interesting article on Microsoft's
potential future... Will
Longhorn become a Microsoft Linux distro?
This echos some of the themes I've been seeing for Microsoft's future...
Irrelevance in the open source wave and the coming crisis point for
Definitely read the whole article, but here's the part that strikes me
Hmm ... perhaps the banking business?
Consider the fortunes of
another American tech powerhouse, General Electric: In 1892, The Edison
General Electric Company and The Thomas-Houston Company merged to form
General Electric. GE, with $575 billion in assets today, is the only American
company to have been listed in the Dow Jones Industrial Index at its inception
that's still on the list today. In 1892, GE made equipment that used electricity,
such as light bulbs and motors, and equipment that produced and transmitted
electricity -- a great business model for the late 19th century.
Nevertheless, GE lost the
19th-century standards wars -- Westinghouse's (and Nikola Tesla's) alternating
current beat out GE/Edisons' direct current -- and GE was forced to build
AC products. GE went on to great success; Westinghouse exists today only
as divisions of other companies, while GE is fifth on the Fortune 500 and
employs 315,000. Interestingly, these days, almost half of GE revenues
come from financial services; only about 15% are related to electric power,
once its core business. GE is as much a bank as it is anything, and that
may be Microsoft's future if its proprietary technology fades away.
And Microsoft does appear
to be on the verge of losing the technology lock-in that goes with its
closed, proprietary standards and software. Nothing I've heard about Longhorn
convinces me that it will be anything but the latest way for Microsoft
to attempt to extract yet more upgrade revenue. And Microsoft's other ventures
-- Xbox, MSN, media convergence schemes et al. -- are all but laughably
unsuccessful, buoyed only by the huge cash flows that Windows and Office
But will Microsoft stand
idly by as its franchise crashes, as Apple Computer once did, before radically
re-focusing its culture under returned founder Steve Jobs? I don't think
so; Microsoft clearly takes Linux seriously. The MS "don't-lose-to-Linux"
fund, the shuttling in of high-level executives to help close deals, the
company's recent back-pedaling on Licensing 6.0 deadlines and heavy discounting
all point to a company that is unlikely to take the open source threat
May mobilize completely
against open source
Just as Microsoft woke up
to the Internet in time, at least, to head off Netscape (if not open standards),
I think you will see Microsoft mobilize completely in 2004 to combat open
source. And it won't be a PR exercise like Microsoft's ballyhooed 2002
on security that preceded both Windows XP and the worst epoch in MS virus
But how will Microsoft, a
centralized industrial giant, target the notoriously uncentralized open
source development model? Short of buying legislation to outlaw open source
development (MS has, after all, branded
open source "un-American"
the World Intellectual Property Organization to drop plans for an open
source conference), MS has few options -- and notoriously little success
-- in shutting down open source software.
IBM, Sun, HP, Apple, Novell,
et al. -- nearly very major technology company except Microsoft -- has
embraced open source, and ditto for many, if not most of Microsoft's major
customers. Pretty soon, it won't take strategic genius to see that MS'
options for another round of proprietary 'rinse, repeat, buy upgrade' are
dwindling. MS will face the high cost of proprietary software development
and maintnenace at the same time as its pricing is under increasingly heavy
pressure. Even with $50 billion in the bank and 80% margins, something
eventually will have to give.