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.