The Open Road

Once a monopolist, always a monopolist? Not in Microsoft's case. While no one will accuse Microsoft of being a forlorn Tiny Tim, it's also no longer the Ebeneezer Scrooge that it once was. In fact, Microsoft seems haunted by the ghost of monopolies past, to the point that it has lost its ability to fight on equal terms for new markets.

Look at the markets the U.S. government sought to open by suing Microsoft for monopolistic practices. Microsoft's market share in media players, Windows, etc. remains largely unaffected by the government lawsuits.

Where Microsoft has lost market share (as in Web browsers and mobile), the competition hasn't relied on consent decrees and the like to win. Firefox wins because of its community development and distribution. Apple's iPhone and Google Android are trouncing Windows Mobile because they significantly change the rules of engagement for mobile while providing a better experience.

Government, in other words, probably solved little. But what it did was create a culture of caution within Microsoft that stultifies its ability and desire to compete. (We should note that just today, the European Commission formally ended its browser-focused antitrust pursuit of Microsoft, following concessions by Redmond.)

Microsoft's competitors, like Google, thrive in the wake of this fear, uncertainty, and doubt that plagues Microsoft. Ironically, competitors like Google do many of the same things that got Microsoft into hot water with the U.S. Justice Department.

Google et al. are free to compete. Microsoft is not.

Granted, this constricted freedom may be more psychological than real. As a journalist friend said to me on Tuesday, "Everybody thought Microsoft laughed off the antitrust thing. But I think it really did take the wind out of their competitive sails."

I do, too. In fact, a few years ago a friend and I set out to start a business delivering Microsoft Office-like functionality to mobile phones, which we ultimately abandoned. We didn't worry about Microsoft suing us for patent or copyright infringement. My friend had successfully sued Microsoft for anticompetitive practices in the Caldera litigation. We knew Microsoft's hands were tied by its antitrust settlement.

Microsoft is not the same company it once was. It's under siege, and seemingly incapable of responding. I think we're the poorer for it.

No, this isn't a paean to Microsoft monopolies. Rather, it's a plea for a Microsoft that competes vigorously to win.

Not one that repents in sackcloth and ashes for the "sin" of competing with open source. Not one that is continuously constrained by various antitrust authorities even as it erodes market share for the products in question.

I don't want a monopoly. I understand the important competitive principles that Mozilla and others are fighting for in the ongoing browser/etc. wars.

But I want a competitor again. Microsoft has lost its fight. This should concern us.

It should bother us because companies like Google need to be kept on their toes. It should nag at us because Microsoft writes great software that is comparatively easy to use, and we need its influence on the market.

I hardly use Microsoft software, preferring Apple and Google and open source. But I'd still like Microsoft's influence on the market, and not as a milquetoast competitor too afraid of antitrust shadows to thrash a competitor. Man up, Microsoft.

In the past week, the open-source business community appears to have reached consensus: making money from open-source software is a bad model, but making money with open source is golden.

This can't be good for Microsoft.

Microsoft has long maintained that as the open-source industry has matured, it has become more and more like the commercial world it sought to leave behind. Fundamental freedoms of open source, like the right to modify source code, are signed away to secure a support contract with Red Hat or another vendor.

In many ways, Microsoft was right. Unfortunately for the Redmond giant, however, the new consensus should lead to less commercialization of open source, and more commercialization around open source. There's a big difference, and it's one that threatens to seriously undermine Microsoft and every other traditional software vendor.

That is, unless Microsoft responds in kind.

The new consensus

This consensus has been articulated by TechDirt, Redmonk's Stephen O'Grady, GigaOm, and here on The Open Road.

In fact, it's a drum I've been beating for over a year as Tim O'Reilly's wisdom on the topic finally caught up with my 33MHz brain.

There are fundamental, strategic benefits to open source: ease of distribution, friction-less adoption, costs, etc. There are also serious downsides when it comes to selling it: people chafe at paying for something if they can get it, or something similar to it, for free.

Such problems don't plague companies like Google, which distributes open-source software to drive more adoption of its proprietary advertising or SaaS services. Even Red Hat isn't really in the software business: not with its Linux distribution, anyway. It's in the business of providing certification and update services; of managing the complexity of an operating system.

It's a great business, but if you had to choose between Google's sales or Red Hat's, it's a no-brainer.

Microsoft's response

As this lightbulb goes on across the industry, companies like Microsoft, which insist on direct monetization of software, with little in the way of open-source complements to fuel adoption (or simply undermine competitors), are going to struggle. More and more companies will give away Microsoft's core business as open-source complements to their own.

So, here's a suggestion for Microsoft as just one good way to respond: open-source Internet Explorer.

Forget Office. Forget Windows. Forget all those other billion-dollar cash cows. Microsoft has no revenue directly tied to Internet Explorer, but IE is the gateway to the next phase of Microsoft's growth. Open-source it.

Cut Google's Chrome and Chrome OS off at the knees. Undermine Mozilla Firefox's raison d'etre. Give the European Commission a reason to love you.

More importantly, give developers something to embrace and extend. Microsoft has been steadily losing browser market share as Firefox eats into it. In some countries, like Germany, Firefox has even surpassed IE's market share.

Fight fire with fire. IE is still the world's most popular browser. Make it the world's most open browser, too.

Every Microsoft business could benefit from this move. Even if one assumes that Microsoft isn't ready to take the plunge and fully open up the development process around IE, here's some comfort: neither has Google around Chrome. Microsoft can still steer the IE ship, even if it were open source.

Microsoft needs a proactive open-source strategy, rather than the reactive policy it has had to date. Open source is a threat, yes, but it's a threat to everyone, especially as the industry collectively comes to grips with open source as a business enabler, rather than as a product to sell.

If Microsoft wants to win big in the new world of Web-based software, it needs a bold strategy. Open-sourcing IE is the starting point.

Follow me on Twitter @mjasay.

Microsoft dominates enterprise IT and likely will for a long time. But the software giant is struggling to match the nimble pace of open source on the Web, a pace being set by Google and others.

As but one example, Microsoft's Internet Explorer lost market share to Mozilla Firefox in September. To compete effectively on the Web, Microsoft will have no choice but fight open-source fire with fire.

This isn't about a need to appease the proverbial "community." It's about broad-based development, low-cost distribution, and, frankly, revitalizing its brand with developers.

Google gets this. While Google has long embraced open source like Linux and MySQL to give it flexible, low-cost technology with which to scale out its operations, the company has dramatically increased its open-source developer outreach in the past two years. And while some companies dribble out open source at the edge of their operations, Google is releasing core software like Wave and Android for open-source communities to help develop and shape.

The result? A loud and loyal following. Google may not get much in the way of quality external contributions from these efforts (It's still too early to tell.) But the strategy is already paying for itself in terms of marketing, if nothing else.

Hence, while Microsoft's mobile software has stalled for years and recently dropped to 4 percent, according to CNET's report on recent AdMob data, Google Android jumped from 2 percent to 7 percent in just six months.

That's the power of community.

It's a community that Microsoft arguably has in the enterprise, but which it emphatically lacks on the Web. Facebook-style developers simply don't think of coding in Microsoft's .Net. They write LAMP applications. To match this, Microsoft is going to need to join the open-source party.

Microsoft is slowly getting the message. For example, the company has been optimizing Web technology like open-source PHP to run well on Windows. More interestingly, Microsoft's experimental Barrelfish multicore operating system has been released under a highly permissive BSD-style open-source license.

The use of a BSD-style license suggests Microsoft is serious about adoption of the project, and of generating trust with developers. Developers can take BSD-style code and do pretty much whatever they want with it, with no permission required and no oversight exercised by Microsoft. It's a great move.

Microsoft needs more of this.

The company recently saw its open-source chief leave Redmond for a Silicon Valley cloud start-up. Such movement, from Microsoft to cloud/Web-based computing, is well under way and something that Microsoft can only halt if it starts to play the same game as its competitors.

Microsoft CEO Steve Ballmer seems to think the key to competition is features (in IE8 and elsewhere). It's not. That's just a start.

The key is encouraging and harnessing the power of community. Microsoft, which has done this so effectively in the enterprise, needs to learn to do this on the Web, too, which is tantamount to saying that Microsoft must fully embrace open-source development.

No, it needn't release all of its software as open source. Google certainly doesn't and, until recently, neither did the open-source bellwether, Red Hat.

But Microsoft needs to be doing much more to embrace, without extinguishing, open source. Open source is the key to making money on the Web, and last time I checked, Microsoft still liked money.

Mozilla's Firefox has maintained its steady ascent against Microsoft's Internet Explorer in the global browser market, hitting 22.98 percent vs. IE's 66.97 percent.

However, Sony has now given Google's Chrome browser something that Mozilla has struggled to obtain: a preinstall deal. As CNET reports, Google Chrome is being installed on Windows PCs alongside IE, with other distribution deals likely.

Finally, a clear choice for consumers.

Google Chrome still accounts for less than 3 percent of the global browser market, but it has something that even Firefox can't match: a dominant, global consumer brand. Google Chrome isn't interesting to Sony because of its market share in Web browsers, but rather because of its overall consumer brand coupled with steady innovation in browsers.

Intriguingly, this Chrome deal opens up the possibility that Sony, as well as other computer manufacturers, will eventually sign on to ship Google Chrome OS, Google's Netbook-optimized Linux operating system.

At the same time, this move may open the door for Mozilla to snag its own preinstall deal(s) with competitors to Sony, who will also likely want to buy into Google's brand but may prefer the Firefox option, given its wider adoption. Firefox users have been pressuring major hardware vendors to preinstall Firefox for years, but the best Mozilla has done is to get Firefox preinstalled with Linux-based notebooks and Netbooks.

That's hardly something to cheer about, given the small share of Linux in mobile personal computers.

This Google Chrome preinstall leaves an opening for Mozilla, but to capitalize on it Mozilla must improve its message. It has recently been claiming that we're hitting a "seat-belt moment" in which browser security could lead to consumers flocking to Firefox. But it's hard to get excited about browser security, no matter how important it is.

Much more interesting are Mozilla's plans to update its browser to 4.0 by the end of 2010 and to release Fennec, its mobile browser, before the end of 2009, according to TG Daily. Extending Firefox to my mobile device? That is something consumers can get excited about which, in turn, should stir up interest from hardware vendors that are looking to bridge their smartphone and laptop strategies.

Back to Sony. Its open-source credentials have been called into question due to its rootkit debacle and decision to restrict Linux on the PlayStation 3, but this new decision to preinstall Chrome should redeem it with the open-source community and give Sony a ready-made marketing machine.

The browser market, already competitive, just became even more so. Google is at the top of its game right now, but so is Mozilla. Microsoft, for its part, is reportedly holding meetings in D.C. that some Beltway insiders have dubbed as "screw Google" gatherings. But Microsoft probably should be spending more time developing innovative browser solutions to compete with Google and Mozilla.

Follow me on Twitter @mjasay

Net Applications has finally published its browser market share numbers for July, and the results are surprising. Given European summer holidays and Mozilla Firefox's large user base in Europe (35 percent market share), Firefox should be seeing a significant decline in market share through the summer months.

But it isn't.

Instead, as detailed below, Firefox market share continues to hold steady at 22.47 percent, while Internet Explorer also treads water at 67.68 percent. Only Safari (4.07 percent) and Google Chrome (2.59 percent) show appreciable, sustained growth over the past few months.

With Firefox recently surpassing its one-billionth download, we should see rising market share in the fall, unless back-to-school PC sales give IE a bump.

But I don't think IE will win over the student crowd, which is more likely to be a Mac (Safari) crowd than a Microsoft one. And so I suspect we'll continue to see Firefox (along with Safari and Chrome) rising against IE.

After all, eventually even the Griswalds come home and get back to work. When they do, more and more will be using Firefox.

Follow me on Twitter @mjasay.

Microsoft may be its own toughest competitor. As noted by Mozilla's Asa Dotzler, Microsoft's new Internet Explorer 8 browser is taking the browser market by storm...so long as you define "browser market" as "Internet Explorer 7." Mozilla's Firefox 3.5 browser, at 30 million downloads and counting, isn't being affected by IE 8's uptake. But then, neither is IE 6.

It's only IE 7 that is getting squeezed by IE 8. And you thought they were friends...

Here's the data on IE market share:

This suggests that Firefox, with roughly 22 percent of browser market share, is the second-most widely used browser on the planet. Not bad when you consider the previous state of affairs when Firefox 1.0 was launched, as Dotzler does:

Back then IE 6 was the most popular browser with almost 85% of Web usage followed by older IE versions accounting for another 10 points of share, and with all other vendors' browsers accounting for only 5% of usage.

In other words, we have real competition again, competition that sees an open-source upstart seriously challenge Microsoft for first place in browser usage. Mozilla has accomplished this by making Firefox easy to use, easy to contribute to (which keeps getting easier, as Glyn Moody reports), and powerful through a large and growing community.

Importantly, Mozilla has had to fight for every user. Unlike IE, Firefox isn't pre-installed with Windows. That "30 million" number I cited above? That's not even due to an auto-update feature, which Mozilla has yet to turn on. Once that happens, Firefox 3.5's impressive download numbers should soar.

Perhaps Microsoft should stop competing with itself and start competing with Firefox...?

Follow me on Twitter @mjasay.

Despite the rise of open source within the federal government, Mozilla's Firefox has yet to gain an official nod from the Department of State, at least according to a recent question-and-answer session that Secretary Hillary Clinton and Under Secretary Patrick Kennedy hosted last week, with an ironic back-and-forth on Firefox kicked off by government employee Jim Finkle:

Finkle: Can you please let the staff use an alternative Web browser called Firefox? I just--(applause)--I just moved to the State Department from the National Geospatial Intelligence Agency and was surprised that State doesn't use this browser. It was approved for the entire intelligence community, so I don't understand why State can't use it. It's a much safer program. Thank you. (Applause.)

Clinton: Well, apparently, there's a lot of support for this suggestion. (Laughter.) I don't know the answer. Pat, do you know the answer? (Laughter.)

Kennedy: The answer is, at the moment, it's an expense question. We can --

Finkle: It's free. (Laughter.)

Kennedy: Nothing is free. (Laughter.) It's a question of the resources to manage multiple systems. It is something we're looking at. And thanks to the secretary, there is a significant increase in the 2010 budget request that's pending for what is called the Capital Investment Fund, by which we fund our information technology operations. With the secretary's continuing pushing, we're hoping to get that increase in the Capital Investment Fund. And with those additional resources, we will be able to add multiple programs to it.

Yes, you're correct; it's free, but it has to be administered, the patches have to be loaded. It may seem small, but when you're running a worldwide operation and trying to push, as the secretary rightly said, out fobs and other devices, you're caught in the terrible bind of triage of trying to get the most out that you can, but knowing you can't do everything at once.

Under Secretary Kennedy makes a good point: deploying Firefox isn't free, in terms of administration. But then, nothing is, including Internet Explorer. The real question is whether Firefox is easier and more cost-effective to support than IE. Mozilla has made some recent moves to make it such. We'll see if the government is listening.

Follow me on Twitter @mjasay.

As I type this, Firefox 3.5 is blazing past 5.6 million downloads, having been released just a day and a half ago. While such uptake for Mozilla's upgraded browser is impressive, the bigger story is how Firefox 3.5 is upgrading the Web with its extensive support for HTML 5. Microsoft's Internet Explorer (IE) 8 has brought the company's browser back into the 21st century, but its sluggish (and perhaps perverse) response to emerging Web standards threatens to leave it in Web 1.0 Blunderland.

ZDNet's Mary Jo Foley wonders if the departure of Bill Gates has taken some of the bite out of Microsoft, and she may be on to something. Regardless, Microsoft needs to quickly execute to outflank Firefox or it threatens to let Mozilla, not Microsoft, define the Web, as Slate implies:

The best thing about the new Firefox is that it gives us a peek at the Internet of tomorrow...Firefox 3.5 offers the best implementation of the (HTML 5) standard--and because it's the second-most-popular Web browser in the world, the new release is sure to prompt Web designers to create pages tailored to the Web's new language. In other words, Firefox isn't just an upgrade for your computer; it could well prompt a re-engineering of the Web itself.

But it's not just HTML 5. Firefox is innovating in a number of other areas, including "location-aware browsing" on the "desktop," while Mozilla's Weave is experimenting with new ways to enrich identity in the browser. In tandem, Mozilla's team is also actively working on improving the online video experience.

And that's just this week.

It took Microsoft two-and-a-half years to move from IE7 to IE8, while five years passed before the company updated IE6 with IE7. The company seems to be moving faster on browser development now, but is it fast enough to keep up with Mozilla, not to mention Apple (Safari) and Google (Chrome)?

It won't be enough for Microsoft to borrow features from Mozilla's Firefox. Microsoft needs to innovate again, and not simply in its marketing department.

Also, it would be nice if IE were available for more than Windows. Mozilla is available on Linux, Mac OS X, and Windows, and it doesn't seem to slow its development pace down. Perhaps Microsoft should stop trying to protect Windows at the expense of losing the Web?

Of course, Mozilla, too, faces a host of competitive issues, as CNET describes. But Mozilla has never been shy about innovating. It exists to improve the Web, and understands that a competitive browser market does that...even if Firefox sometimes has to play catch up.

For today, however, the field is Mozilla's to lose.

Follow me on Twitter @mjasay.

Steve Ballmer needs to brush up on Roman history. Otherwise he seems doomed to repeat it, as two recent Microsoft campaigns suggest.

Microsoft has been dominant for so long that it has grown soft. As Edward Gibbon wrote in his exceptional "The Decline and Fall of the Roman Empire," it is not outside enemies that crushed Rome so much as its own effete greatness:

The decline of Rome was the natural and inevitable effect of immoderate greatness. Prosperity ripened the principle of decay; the causes of destruction multiplied with the extent of conquest; and as soon as time or accident had removed the artificial supports, the stupendous fabric yielded to the pressure of its own weight.

Two new Microsoft directives suggest that the writing is on the wall for the once-great company. And this isn't even to mention Microsoft's tactics to squash Linux's growth in the Netbook market.

First, Microsoft has kicked off a "Get the Facts" browser campaign that is long on hyperbole and short on facts. Reading Microsoft's browser comparison chart, one would think that using Mozilla Firefox or Google Chrome is a fast track to leprosy: IE apparently dominates in security, privacy, ease of use, healing the sick, and causing the lame to walk.

Speaking of "lame," IBM's Savio Rodrigues warns us to not be fooled by comparison tables that dramatically favor one product over others. Internet Explorer has gotten better over the years (It only had one way to go), but Microsoft's claims aren't even credible when it skews the results so dramatically in its favor.

Mozilla's own marketing for Firefox is very, very different.

Not content to let false advertising do the trick, Microsoft has also resorted to paying people to use its browser and calling users "idiots" if they opted to try something else. As TechCrunch reports, Microsoft has backed down from the ad hominem attacks, but the company is starting to look desperate.

Microsoft customers seem to be pining for the good ol' Windows days.

(In need of charity itself, Microsoft is contributing to charities for every download of IE8. Awww....)

As if this browser desperation weren't enough, Microsoft has kicked off a second initiative that reveals just how unloved its "innovation" has become. Microsoft has confirmed its 18-month Windows 7 to XP downgrade policy.

There are very good reasons for software vendors to prod customers into staying current with software releases, but it is amazing just how hard Microsoft has had to work to convince Windows customers to leave XP. Apple and Linux customers seem to upgrade to their latest and greatest operating systems, while Microsoft customers seem to be pining for the good ol' Windows days.

It's one thing to have an upgrade policy. Having to articulate a downgrade policy is a signal of Microsoft defeat, not victory.

Gibbon wrote that "instead of inquiring why the Roman empire was destroyed, we should rather be surprised that it had subsisted so long." I feel the same way about Microsoft. It has done so much for the software industry--some very negative, much very positive--but it seems to have lost the plot. It is telling when the company's best product in years is the XBox, a hardware platform, as Bob Rosenberg noted to me over email.

Microsoft is a victim of its own desktop success, a fact that Google is using against it. Unless Microsoft can break out of its downward spiral of negative advertising born of stifled innovation in its products, it will fall. Sort of like Rome. Because of immoderate greatness.

Follow me on Twitter @mjasay.