Whenever Microsoft starts to look like a company that is ready to play fair with open source, along comes its CEO, Steve Ballmer, to ruin all the goodwill the rest of the company has created.
Linux. It's all about Linux. We've been competing with Linux for a number of years. I want to describe our value proposition. We are a high-volume player. We do not, like Apple, believe in low volume, very high prices. Apple's a great company, does a fine job, but their model says high margin, high quality, high price, that's kinda how they come to market.
We say we want big market share, but with big market share you take the lower price.
Well, along comes Linux, and they say, "we have no price," which of course, we know for IP and other reasons, of course they have a price. But they say "we have no price." The problem you have with these so-called free alternatives is there's also not the incentive to a lot of the hard work to build out the ecosystem to support the hardware vendors that is required.
So a model like ours, which is high volume and high value but low priced but not free. You could say are you guys in the middle ground or are you where you want to be? And I say we're exactly where we want to be.
You can listen to it here:
It's bad enough that Ballmer completely botches his math on Apple's strategy. Maybe he didn't get the memo that Windows-based PC shipments have been declining even as Mac shipments continue to rise, and that even his Pyhrric victory in Netbooks is costing Microsoft money. He also seems to have missed the fact that Apple's iPhone has doubled its market share in the past year even as Windows Mobile stalls.
Ballmer says, in other words, that Macs are about "high quality and low volume," but the market says "high quality and ever increasing volume." But then, Ballmer is usually wrong when he attempts to discredit Apple.
Unfortunately, he's zero for two in his at-bats with this interview, because his attempts to discredit Linux also fall flat. Like it or not, Linux is free. He may not like that fact, but he can download Linux for free from a variety of sources. Here's Ubuntu: try it.
He wouldn't be alone. IDC is seeing a massive uptake in Linux adoption because (surprise, Mr Ballmer!) it's a highly cost-effective solution in bad economic times. U.S. retailer The Gap, for example, just dumped Microsoft Windows for Red Hat Enterprise Linux because of its positive return-on-investment and superior flexibility.
Microsoft may have been able to get Novell to "put a price on Linux" through intellectual property scare tactics, but it hasn't worked for the market leaders, Red Hat and Canonical (Ubuntu). Nor has it worked for the leading hardware and software vendors that depend on Linux, e.g., IBM, Oracle, SAP, etc.
Incidentally, these same vendors make up a significant ecosystem around Linux, the very same ecosystem that Ballmer suggests won't form due to a lack of incentives. Apparently he didn't talk to his closest partner, Intel, which is now the No. 2 contributor to the Linux kernel. I guess he didn't realize that there's a lot of money to be made around Linux, and it's money that doesn't have to be shared with Microsoft.
All of which leaves Microsoft squeezed by high-quality, high-volume strategies being used by Apple and by open-source vendors like Red Hat. It's not a battle he's going to win through soundbites. He's been trying that for years, and the market is waiting for Microsoft to learn to compete again, to build real value and to sell it.
With Windows 7, Microsoft appears to be back in action. This is welcome. Time to let your products speak louder than your hype and FUD, Mr. Ballmer.
Follow me on Twitter @mjasay.
Microsoft CEO Steve Ballmer, speaking to the technology heads of U.S. federal agencies on Wednesday, suggested that the global economy is in for significant change, as TechFlash reports.
While this suggestion is not surprising, I found his comments about a "resetting" of the economy, a theme he has been discussing a lot lately, interesting in that it would likely favor open source:
Essentially, the economy is going to reset to a different level, and then again be propelled by what really should be, and typically are, the fundamental drivers of economic growth--which are really productivity and innovation.
(The) things which are really productive and really valuable and really make a difference, they'll either get funded at companies like ours and our competitors (or) get funded by the venture capital community. We may not get the eighth, ninth, and tenth start-up in every area, but we'll get the first four, five, or six that make sense, and we'll get plenty of good competition.
(When) I tell you the (Microsoft R&D) budget was over $9 billion and is going to remain over $9 billion, it speaks to this fundamental faith and belief and excitement that we have about the things technology will do, and we've got to be at that table.
Actually, all it tells us is that Microsoft may be spending far too much to develop its products, R&D spending which, to date, has yet to demonstrate much market value for Microsoft. It also suggests that Microsoft must put a higher price tag on its products to ensure that it recoups its R&D costs. Guess what that means? It means that Microsoft may not be able to accommodate the "resetting" of price tags that buyers are already demanding.
In that environment, open source wins. Microsoft and every other proprietary vendor are going to struggle to compete with open source, which has an initial cost of nothing. As Ken Starks notes on his blog, this isn't making those dependent on the proprietary ecosystem very happy, but eventually, the ecosystem will reset toward open source, too.
CIOs are also looking to open source to drive innovation: one CIO told me that for any projects that have the potential to competitively differentiate his company, open source is the innovation platform it'll use every time.
It's no wonder, then, that Gartner finds 85 percent of enterprises adopting open source to drive efficiency through code reuse, lower costs, and more. The economy is in the process of resetting, as Ballmer speculates, but it's not necessarily going to reset in his company's favor, though I suspect that Microsoft, with its comparatively low price points and integration, will do well.
My own company has seen a dramatic increase in our pipeline, and in conversations I've had with the CEOs of Pentaho, RiverMuse, and other open-source companies, it's largely the same.
The economy is resetting for open source. It's open source's game to lose.
Follow me on Twitter at mjasay.
Ralph Waldo Emerson once declared, "A foolish consistency is the hobgoblin of little minds." Steve Ballmer, Microsoft CEO and turgid (and very consistent) promoter of the software company's longstanding agenda against open source, apparently wants to step out of his proprietary box every so often, as he did Wednesday at the Mobile World Congress.
Ballmer, taking aim at Apple's closed iPhone ecosystem, declared the Apple kettle black and pleaded for openness, as CNET News reports:
I agree that no single company can create all the hardware and software. Openness is central because it's the foundation of choice.
I guess Ballmer forgot about how Microsoft has insisted it will emulate Apple's success by vertically integrating hardware and software? Or perhaps he's overlooking the vertical integration Microsoft has long pushed with Windows-plus-Internet Explorer (and other Microsoft software), or Microsoft's new push to tightly tie SharePoint in with Office, Windows, Active Directory, and more?
Ballmer has a short memory on Microsoft's strategies and a long leash when it comes to public pronouncements. So perhaps he can be forgiven for taking the word "openness" in his mouth and pretending it fits there. It doesn't or, at least, it hasn't.
Perhaps this is a new Microsoft, one that embraces open standards, open source, open APIs, and open competition. Perhaps. But that's Microsoft Chief Software Architect Ray Ozzie's schtick, not Ballmer's.
Public sophistry aside, Ballmer has not demonstrated that the lock-in strategies he has embraced and advanced for the past three decades have lost his favor. He's not the man to lead Microsoft to greater openness, given his past, and he sounds hypocritical pining for openness when nothing short of the U.S. government could wring the slightest concessions to openness from Microsoft.
Follow me on Twitter at mjasay.
I fully expected to die never having heard a positive word escape Microsoft CEO Steve Ballmer's lips with regard to open source. Based on Ballmer's comments made in Sydney on Friday, however, it may be time for me to start picking out my funeral arrangements.
Speaking at a Power to Developers event, Steve Ballmer took questions from the audience and, as usual, was confronted by a question on open source. The significance here is not any earth-shaking pro-open source pronouncement from Ballmer. It's that Ballmer neglected to throw chairs around the room and responded rationally. This is progress. Really.
[Question:] Why is IE [Internet Explorer] still relevant and why is it worth spending money on rendering engines when there are open source ones available that can respond to changes in Web standards faster?...
[Ballmer's response:] Ballmer began his answer philosophically, saying Microsoft will need to look at what the browser is like in the future and, if there is no innovation around them, which he thinks is "likely", Microsoft may still need its own browser because of proprietary extensions that broaden its functionality.
"There will still be a lot of proprietary innovation in the browser itself so we may need to have a rendering service," he said...."Open source is interesting," he said. "Apple has embraced Webkit and we may look at that, but we will continue to build extensions for IE 8."
Stop the presses! Ballmer is a rational human being!!!
I'm kidding, of course, but this could well be the most rational, pragmatic, open-source-related comment from Ballmer that I've ever read. Larry Dignan at ZDNet calls it a "throwaway line," but I think it's much more. It suggests that Microsoft truly has gotten its arms around open source and has discovered what nearly every other software vendor on the planet has discovered: open source can a useful component in a larger software strategy.
No, it doesn't mean that Microsoft needs to open-source all of its technology, or even all of the technology in one particular product (as here, with the browser). It just means that Microsoft should use the best software available, including when it is open source.
If you've yet to watch Microsoft CEO Steve Ballmer's recent Churchill Club comments on everything from server virtualization to search to the mobile market, you're in for a treat. Ballmer is at his best, ripping on everything and everyone...except Microsoft.
Indeed, it's when Ballmer hits rewind on history to argue that Apple will lose in all the markets in which it is currently thriving--including smartphones and laptops--because it's not enough like Microsoft that he hits peak form:
Asked about smartphones, Ballmer said Nokia, Research In Motion, and Apple will all lose out as the market expands over the next five years, because they design their own proprietary hardware and tie it closely to their software.
Nokia leads the smartphone market today with about a 30 percent share, he said. "If you want to reach more than that, you have to separate the hardware and software in the platform," he said.
In other words, he thinks the same strategy that helped Microsoft become the leader on the desktop--licensing its OS for use by other hardware makers--will let it win out on smartphones. Long term, he said, the battle will be between the Symbian OS (which is now open source), mobile versions of Linux, and Windows Mobile.
I have some sympathy for this view, having argued that Google's Android is weakened by its lack of control over hardware (and boy, is its current hardware ugly). But this is a problem for the next few years.
Will Microsoft's strategy to separate hardware and software win long-term? Maybe. indeed, probably. But "in the long run," as John Maynard Keynes famously said, "we're all dead." Microsoft's mobile business may not be around long enough to be able to gloat over the iPhone's diminished fortunes because, well, those fortunes are rocking right now.
... Read more
Perhaps it was just a stunt to drive traffic (It's working!), but I enjoyed Valleywag's collection of the "10 most terrible tyrants of tech." It's perhaps telling that some of the industry's top companies (Microsoft, Apple, Salesforce.com) are headed by some of the most difficult people with whom to work:
Here's to the screaming ones. The chair-throwers. The death-threat makers. The imperious gazers. The ones who see things differently -- and will stare you down until you do, too....[T]hey have no respect for conversational decibel levels. You can cower before them, hide from them, quote them behind their backs, or vilify them. About the only thing you can't do is ignore them. Because they're so damn loud.
That's the description. Here's the list. You'll need to visit Valleywag, however, to find out just how abrasive these people can be:
- Apple CEO Steve Jobs
- RealNetworks CEO Rob Glaser
- Salesforce.com CEO Marc Benioff
- VMware cofounder Diane Greene
- Ex-Jobster CEO Jason Goldberg
- Microsoft chairman Bill Gates
- Ex-AOL sales chief David Colburn
- TechCrunch editor Michael Arrington
- Google SVP Jonathan Rosenberg
- Microsoft CEO Steve Ballmer
Enjoy.
A new survey by KACE, a systems management appliance company, suggests that 60 percent of those surveyed have no plans to deploy Microsoft Windows Vista, a 10 percent rise over a similar survey administered by KACE in November 2007. A full 42 percent of these are actively exploring Vista alternatives, with 11 percent having made the leap to alternative platforms like Mac OS X or Linux.
Eighteen months after the release of Windows Vista, enterprise adoption is still in the single digits, and the majority of that seems to have come from upgrades of legacy Windows versions, not XP.
How does Microsoft hope to compete? By copying Apple, the company that is kicking its tail in terms of growth. It worked once before....
In an email sent by Microsoft CEO Steve Ballmer to Microsoft employees, Ballmer argued that "the success of Windows is our number one job," while acknowledging that to compete with little Apple that it outsells "30-to-1" it will change the way it works with hardware companies to try to catch up.
... Read moreIn a clear sign that Steve Ballmer has lost touch with reality, at a recent partner event Q&A the Microsoft CEO addressed the issue of "coolness" and how Microsoft competes in coolness.
On one hand, Ballmer recognizes that Microsoft is not cool and that the enterprise buyer wants safety, not necessarily coolness. But on the other hand his comments reveal an earnest desire to be cool...yet he clearly doesn't recognize what will get his company there.
The way we [will] be newsworthy, if we're successful, in and out, every day, all the time for the next 10, 20, 30 years, we're not going to make it on, hey they're brand new, we've never seen them before. We're going to have to surprise people. And I think we will. I think we'll surprise people with the quality of new PCs people see, where we've worked really hard with Vista, and people say, wow, these things are actually lighter, they actually have better battery life, they're cheaper, they're more affordable, they're more flexible, they come in more sizes, wow, that's cool.
... Read more
The Economist's Ludwig Siegele opens up one of the most important questions for the next 10 years of software: What happens to Microsoft after Bill Gates leaves?
In Ray Ozzie's (and, perhaps, Microsoft's) view, Microsoft's new goal is the same as the old goal: dominate everything. But the battle has shifted to the "cloud" now. Complicating the matter further, Microsoft no longer has a technical leader, one who combines vision, tenacity, and introspection. Instead it has an aggressive, sometimes bumbling bloodhound of a CEO, Steve Ballmer.
Can Mr. Protect-My-Desktop-Monopoly-By-Whatever-Means-Necessary really push Microsoft to the future? Can Ballmer deliver on this goal? According to Siegele, Microsoft's goal:
...is to become the dominant force in the forthcoming era of cloud computing--or, to refresh Microsoft's original mission: "to supply services to every desk, to every home and to every hand."
To understand what that means, and the difficulties it poses Microsoft, start with the idea that computing is undergoing one of its great periodic shifts....Now communications is catching up with hardware and software and, thanks to cheap broadband and wireless access, the industry is witnessing a pull back to the middle. This is leading much computing to migrate back into huge data centers. Networks of these computing plants form "computing clouds"--vast, amorphous, delocalized nebulae of processing power and storage.
This is a huge opportunity for Microsoft, Google, Yahoo, Amazon, and others. But only Microsoft brings a massive ball-and-chain to the party called the Windows desktop business, which accounts for the vast majority of its revenue and pervades its company culture. The very thing that makes Microsoft so successful may well ensure that it will play a bit part in the future of computing.
... Read moreIt's nice to see that Microsoft's Bill Gates experiences the same frustration with Microsoft's software that many of us do. In a fascinating email that Gates sent back in 2003 (which came to life through the antitrust proceedings), he takes his executive team to task for making it amazingly hard to buy and use Microsoft's Moviemaker software.
After weathering a storm of pain to download the product, feeling like he's finally on the cusp of getting his software but discovering instead that he was being asked to download garbage, Gates writes:
Someone decided to trash the one part of Windows that was usable? The file system is no longer usable. The registry is not usable. This program listing was one sane place but now it is all crapped up.
But that is just the start of the crap. Later I have listed things like Windows XP Hotfix see Q329048 for more information....What an absolute mess.
I don't cite this to criticize Bill Gates. If anything, this candor is wonderful and indicative of what any software executive should be saying about his company's software in an effort to make it better. Intel's Andy Grove used to suggest that "only the paranoid survive." In Bill Gates' case, he might insist that "only the hyper-critical survive."
Microsoft has its problems. It's good to see that the company may well see those problems more acutely than its customers do.
It's also interesting to peer behind the Microsoft firewall to see that there may not always be some grand, nefarious plan behind the things Microsoft does.
... Read more
