Microsoft tries to battle free with cheap. It won't work

Microsoft, making the same mistake that Oracle made a few years ago with its low-end Oracle 10g Express Edition database, has decided that the best way to hold off open source nipping at its heels is to create a portfolio of low-end, cheap products.

It won't work. Microsoft provides compelling value, but this is not it. "Crappy but cheap" is not a compelling value proposition against open source, which already has an array of software that fits that model (just as there's lots of cheap but crappy proprietary software out there already).

Microsoft gets it right in its annual report: The way forward for Microsoft is to continue to provide a broad portfolio with (more-or-less) tight integration between the products. That's what will continue to position Microsoft well against open source, which tends to be a disparate array of non-integrated point solutions. It won't always work, but it will work for the near term.

Crappy but cheap? It isn't going to stop open source. Open source wins, in part, because it's cheap, but anyone that has run Linux, Apache, Zimbra, etc. knows that there is plenty of open source that wins because it is awesome...and just happens to be cheap as an added benefit.

[haochela]

A pity that mention of Zimbra was buried at the bottom of this story, right behind etc. In the context of the groupware, collaboration and Web 2 mash-up offerings that it brought to the table, Zimbra had to be high among M$'s best reasons for attempting to 'embrace and extend', then, as is their style, try to take down Yahoo! with not one but two failed buy-out attempts (or as the Open Source hippies say, 2 FUD campaigns for the price of one threat ;-). Considering that their product is totally unlocked from and interoperable with Exchange, is 1/2 the price, is more scalable and works better with the new web stuff, and continued to see increased adoption even as Yahoo's share price tanked, M$ has to be worried about what Zimbra potentially does to their biz model in this arena, especially medium mail and scheduling, and small biz hosting services. How can you continue to ask for $25/CAL in the US and $55 overseas for groupware and collaboration stuff with Zimbra offering something that costs less is open and works better?

Now that Yahoo! has survived their stockholder meeting (albeit a little worse for the wear) I wonder if M$ will have another go? More to the point, what will Yahoo do next?