[ossig] A farewell missive to Microsoft

["lks" <lks@webpres.com.my>]

A farewell missive sent by David Stutz, a respected technical thinker at
Microsoft, is more intriguing than most.
---
Advice to Microsoft regarding commodity software
(c) 2003 David Stutz
http://www.synthesist.net/writing/onleavingms.html


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The market for shrink-wrap PC software began its slow upmarket ooze into
Christensen obsolescence right around the time that Microsoft really hit its
stride. That was also the time of the Internet wave, a phenomenon that
Microsoft co-opted without ever really internalizing into product wisdom.
While those qualified to move the state of the art forward went down in the
millennial flames of the dotcom crash, Microsoft's rigorous belief in the
physics of business reality saved both the day and the profits. But the tide
had turned, and a realization that "the net" was a far more interesting
place than "the PC" began to creep into the heads of consumers and
enterprises alike.

During this period, most core Microsoft products missed the Internet wave,
even while claiming to be leading the parade. Office has yet to move past
the document abstraction, despite the world's widespread understanding that
websites (HTML, HTTP, various embedded content types, and Apache mods) are
very useful things. Windows has yet to move past its PC-centric roots to
capture a significant part of the larger network space, although it makes a
hell of a good client. Microsoft developer tools have yet to embrace the
loosely coupled mindset that today's leading edge developers apply to work
and play.

Microsoft's reluctance to adopt networked ways is understandable. Their
advantaged position has been built over the years by adhering to the tenet
that software running on a PC is the natural point at which to integrate
hardware and applications. Unfortunately, network protocols have turned out
to be a far better fit for this middleman role, and Microsoft, intent on
propping up the PC franchise, has had to resist fully embracing the network
integration model. This corporate case of denial has left a vacuum, of
course, into which hardware companies, enterprises, and disgruntled
Microsoft wannabes have poured huge quantities of often inferior, but
nonetheless requirements-driven, open source software. Microsoft still
builds the world's best client software, but the biggest opportunity is no
longer the client. It still commands the biggest margin, but networked
software will eventually eclipse client-only software.

As networked computing infrastructure matures, the PC client business will
remain important in the same way that automotive manufacturers, rail
carriers, and phone companies remained important while their own networks
matured. The PC form factor will push forward; the Pocket PC, the Tablet PC,
and other forms will emerge. But automakers, railroads, and phone companies
actually manufacture their products, rather than selling intangible bits on
a CD to hardware partners. Will Microsoft continue to convince its partners
that software is distinctly valuable by itself? Or will the commodity nature
of software turn the industry on its head? The hardware companies, who
actually manufacture the machines, smell blood in the water, and the open
source software movement is the result.

Especially in a maturing market, software expertise still matters, and
Microsoft may very well be able to sidestep irrelevance as it has in the
past. The term "PC franchise" is not just a soundbite; the number of
programs written for the PC that do something useful (drive a loom, control
a milling machine, create a spreadsheet template, edit a recording...) is
tremendous. But to continue leading the pack, Microsoft must innovate
quickly. If the PC is all that the future holds, then growth prospects are
bleak. I've spent a lot of time during the last few years participating in
damage-control of various sorts, and I respect the need for serious adult
supervision. Recovering from current external perceptions of Microsoft as a
paranoid, untrustworthy, greedy, petty, and politically inept organization
will take years. Being the lowest cost commodity producer during such a
recovery will be arduous, and will have the side-effect of changing
Microsoft into a place where creative managers and accountants, rather than
visionaries, will call the shots.

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 .

Exciting new networked applications are being written. Time is not standing
still. Microsoft must survive and prosper by learning from the open source
software movement and by borrowing from and improving its techniques. Open
source software is as large and powerful a wave as the Internet was, and is
rapidly accreting into a legitimate alternative to Windows. It can and
should be harnessed. To avoid dire consequences, Microsoft should favor an
approach that tolerates and embraces the diversity of the open source
approach, especially when network-based integration is involved. There are
many clever and motivated people out there, who have many different reasons
to avoid buying directly into a Microsoft proprietary stack. Microsoft must
employ diplomacy to woo these accounts; stubborn insistence will be both
counterproductive and ineffective. Microsoft cannot prosper during the open
source wave as an island, with a defenses built out of litigation and
proprietary protocols.

Why be distracted into looking backwards by the commodity cloners of open
source? Useful as cloning may be for price-sensitive consumers, the
commodity business is low-margin and high-risk. There is a new frontier,
where software "collectives" are being built with ad hoc protocols and with
clustered devices. Robotics and automation of all sorts is exposing a demand
for sophisticated new ways of thinking. Consumers have an unslakable thirst
for new forms of entertainment. And hardware vendors continue to push
towards architectures that will fundamentally change the way that software
is built by introducing fine-grained concurrency that simply cannot be
ignored. There is no clear consensus on systems or application models for
these areas. Useful software written above the level of the single device
will command high margins for a long time to come.

Stop looking over your shoulder and invent something!



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