The IT industry is shifting away from Microsoft

We are experiencing a major IT industry shift right now, and if you know where to look you can actually see it as it happens. This shift is all about Microsoft and open source.

Until very recently, Microsoft owned everything in the personal computer business, both low and high on the food chain. The low end was occupied by Palm, the high end by Sun, IBM and others. In the vast soft middle, there was Microsoft and only Microsoft.

Everyone who challenged it was bought out, cheated out of the technology , or generally beaten into the ground with dirty tricks, by ruthless competition, or on rare occasions, with a better product. Listing the failures would consume more column inches than a person could read in a year.

Netscape, Stac, Wordperfect, Novell, and others are among the notable casualties. Those that technically survived are ghosts of their former selves.

Just as the press proclaims the inability of anyone to challenge the Redmond beast, control is slipping from Microsoft. As with any company faced with a huge loss of market share, Microsoft is acting predictably, pretending it is not happening, and putting on a smiley face when asked about prospects. On the inside, Microsoft is as scared as hell.

One of the richest companies on earth, run by one of the richest people on earth afraid? What can you mean?

Hung, Drawn and Quartered
To put things in perspective, Microsoft has always performed better each quarter than the one before. Whenever the financial types settle on quarterly earnings, Microsoft always manages to pull a few more cents per share out of their hat, and beat those earnings. The collective bunch of jackals and worms that are known as 'Wall Street' sit slack jawed in amazement, and give half hearted golf claps. Rinse and repeat every quarter, including the analysts 'amazement'.

How it does this is no trick. It has profit margins on its two major products of over eighty per cent. The rest of the products, from handhelds to MSN and the Xbox are all horrific money losers. Its finances are so opaque and badly presented, that it can shuffle money around from one part of the company to another without anyone noticing. Make too much money one quarter? Stash it in the closet labeled investments, or write off some losses. Not making the numbers? Cash in some assets and make a 'profit'.

Overall, it has been able to show a smooth earnings curve, and surprise on the upside every time it reports a quarter? Monopolies and almost no cost to make your physical product other than R&D has itss advantages.

Corporations cry Linux
About a year ago, things started to change. The cries that Linux would dethrone Microsoft remained the same, but there was a shift in the corporate reaction to those cries. CxOs started to say 'tell me about it'. In a down economy, free is much cheaper than hundreds of dollars, and infinitely more attractive. Linux started gaining ground with real paying customers using it for real work in the real world, really.

Up until then, Microsoft had simply ignored the tuxedoed threat. Then it started reacting with the usual FUD, the Halloween memos, various white papers and clumsily purchased studies. Somehow, people didn't buy the fact that $1,000 a head was cheaper than free, and so Microsoft had to move on to a different tactic. Since it couldn't buy the company that produced Linux, the GPL prevented the usual embrace and extend, and people had simply grown to hate Microsoft for all the pain they had been caused over the years, the firm found itself in a bind. How do you compete when all your dirty tricks are either inapplicable or fail, and buckets of cash can't buy your way out of the hole you are in? Simple, you compete on their terms.

Other than in the last six months, when was the last time Microsoft lowered prices, or gave anything other than a trivial discount on anything? Yeah, right, never. Faced with losing the home office market to OpenOffice/StarOffice, the server side to Linux, databases to MySQL, and the desktop to Linux in the not too distant future, what could it do? It targeted price cuts at those who matter most, the early adopters and other key segments.

The first of these cuts was aimed at MySQL, with the developer edition of SQLServer getting the axe to the tune of about 80 per cent. Then it started a slush fund to prevent high profile companies and organizations from giving Linux that all important mindshare beachhead. Then it came out with a 'student and teacher' version of Office. Hint to the readership, if you don't want to pay $500 for office, the new version doesn't make you prove you a student or a teacher like the last one. Well, none of these tactics is working, and one of the reasons it isn't going as well as Microsoft hoped is its own money grubbing product activation scheme. Without starting the old debate about the cost of pirated software, it is hard to argue against the fact that even with the numbers it spouts off about piracy, Microsoft still clears about a billion dollars a quarter or more. If it wasn't for piracy, the Gates sprouts (little 1.0 and 2.0) could afford to be sent to a good school. Cry for them. In its wisdom, Microsoft decided to squeeze the users a little, and to its abject horror it began to realise that people were willing to take the slightly less functionality of OpenOffice for the $500 a machine discount. Who would have guessed that result? See foot, see gun, see gun shoot foot.

The next winning strategy was to circle the wagons, and lock people in. If you prevent other programs from working with your software, and make your stuff fairly cheap, people will flock to it, right? Well, right to a point, at least until you build up hatred and people have an alternative.

Licensing 6.0, the new 'rent as you go, but do so at our sufferance' was the catalyst here. When it proposed this scheme, people laughed outright. When Microsoft said do it or pay the retail price, people blinked, and a few cried monopoly. This is when people started to take Linux seriously.

Defections, Defections
When Microsoft set a deadline for licensing 6.0, people balked. Adoption was less than the 100% it was counting on, so it blinked and extended the deadline that wasn't capable of being extended. People still didn't flock to the plan, so Microsoft turned the screws and, um, blinked again. Once it was clear that customers weren't viewing 100% plus price increases as a benefit, and Microsoft was looking weaker and weaker with each delay, it stopped delaying. Any reasonable observer would chalk up losing one third of a customer base, and alienating it at the same time, as an unmitigated disaster.

Microsoft touted this as a sign that people didn't truly understand the generosity emanating from Redmond, so it sweetened the pot by offering tidbits to the reluctant. That included training and other things, but no price break. That was the sacred line that it would never cross. For a bit. People still didn't flock back, and high profile clients started to jump ship. What to do, what to do?

The answer was to head off the defections by offering massive discounts. Send in the big names to woo the simple. Threaten behind the scenes. Do anything it takes, and when Microsoft says anything, rest assured that there are things none of us have thought of coming into play with the subtlety of a sledgehammer.

The strange thing is that even this didn't work. People did the math. With expensive lock-ins on one hand, and cheaper, more interoperable software on the other, they started choosing the less expensive route. Imagine that. The high profile defections started happening with more and more regularity, and Redmond was almost out of tricks.

Some defections were headed off, like the Thai government, which pays $36 for Office and Windows XP comes with a 95% discount if you compare it to list. There are probably other similar deals elsewhere that we have not heard about. For every one of the Microsoft victories, there were two or three Linux wins. Then four or five. Now it is not even a contest. High profile defections like cities, governments, and, gasp, IBM, are just the tip of the iceberg, and almost everyone is looking at the pioneers to see if the trail they are blazing is worth following.

If it turns out that these first few companies can make it, expect the floodgates to open, and everyone to follow. The designed in security flaws, that make Microsoft software insecurable, are only adding to the misery. Every day that a company is down due to worms or viruses, it starts re-evaluating Microsoft software. When bidding on the next round of contracts, the memory of all night cleanups tends to weigh heavily on the minds of many CIOs and CTOs.

The latest quarterly numbers showed something that hadn't happened before -- flat Microsoft numbers. It blamed this on large corporations who were skittish in the wake of the Blaster worm. But if you stop and think about that, most companies are on Licensing 6.0 or other long term contracts, so the income derived from them is steady. People who are going to buy Microsoft products will do so, people who have jumped have jumped. A large corporation does not delay purchases like this for a quarter because of a security breach, they will have their licences run out from under them, or they will just buy the software as planned and sit on it if absolutely necessary. Something does not smell right with this explanation.

If Microsoft can't pull off an upside surprise, something is very wrong. It is now at the point where it must beat the street, or the illusion is shattered, and that has this nasty effect on stock prices. If Microsoft didn't meet expectations this quarter, it goes to show that it either couldn't do it, or made a conscious decision not to.

Running low on Wiggle Room
If Microsoft can't beat the numbers, it shows that it is running low on wiggle room, the core customers are negotiating hard, and Microsoft is giving way. Without billions to throw at money losing products like XBox and MSN, can these properties survive? If they can't, that would make a financially healthier Microsoft, but would it still be Microsoft? Could it offer a complete end to end solution if it found itself unable to control the internet? Would it be able to fight the phone wars without being able to casually sign off on nine digit losses? How long will the set top box world take to make money?

The more troubling aspect for the company is if Microsoft decided to report what is really happening. Wall Street is in a Microsoft fed la-la land when it comes to numbers. The stock is absurdly high, and in return, it is expected to do things in return. Once it stops doing those things, it becomes a lot less valuable. And when that happens, shareholders and the Street start asking all those nasty questions that executives don't want to answer. If the stock plummets, those options that Microsoft is famous for as employee incentives become much more expensive, and morale goes down. In short, things get ugly.

For Microsoft to actively shift the company into this mode would signal nothing less than a sea change, one that would bring the company a lot of pain on purpose. I can't see anyone purposely doing this unless backs are to the wall and there is no other way out. A much smarter way would be to ease out of it over the course of a few years, and change the company slowly. That way, you could still prep the analyst sheep, and escape relatively intact.

If I have to guess, I would say that the competition is starting to force Microsoft into a pricing war, and any moron can tell you a price war against free is not a good thing. Don't believe me? Just go ask Netscape. Oh how the worm turns. But price wars are destructive, and will sink Microsoft faster than you can say "$50 billion in the bank". Microsoft can afford to cut prices but after a while those $10 million discounts start to add up. It just won't work when everyone knows the simple truth of Linux.

The fact is, if you are negotiating with Microsoft, and you pull out a SuSE or Redhat box, prices drop 25 per cent from the best deal you could negotiate. Pull out a detailed ROI (return on investment) study, and another 25 per cent drops off, miraculously. Want more? Tell Microsoft the pilot phase of the trials went exceedingly well, and the Java Desktop from Sun is looking really spectacular on the Gnome desktop custom built for your enterprise, while training costs are almost nil.

It isn't hard to put the boot in to Microsoft again and again these days -- being a Microsoft rep must be a tough job. And whatever it does, people are still jumping ship.

Trusted Computing
The problem is that Microsoft just isn't trusted, questionable surveys aside. That knowledge is spreading up the executive ranks. Microsoft has a habit of promising users things, but not delivering.

Security is a good example. A few years ago, Microsoft promised to stop coding XP and do a complete security audit and retraining. Everything would be good after this, it said, trust us. People did. Blaster, Nachia, and a host of others illustrate that Microsoft didn't make anything close to a sincere effort.

So, what comes out of Redmond nowadays? Hot air and Ballmer dance videos made on Macs. Monkey boy is funny to watch, but after an all night patching stint with the CEO yelling at you, it loses its charm. Remember that same Ballmer who said that Microsoft would not release a service pack for Win2K because it would not be released until it was perfect? How about that same security audit for XP that would erase the chances of anything like Blaster ever happening? Anyone think the masses will buy the line for the next release? The truth is they will, and Microsoft knows it.

The phrase 'it will be fixed in six months, trust us' seems to have a magic power when emanating from Microsoft. Every time someone big enough comes to it with a list of complaints, it announces an initiative, comes out with a slick Powerpoint presentation, half a dozen press releases, a Gates speech, and several shiny things to distract people.

The fact remains that security has been getting worse every year since Windows 95 was released. One hell of a track record don't you think? The fact also is that for the first time, Microsoft revenue is flat, it has competition, and it publicly blames security woes for the monetary loss.

The culture at Microsoft , however, prevents change. I was talking to a high level person in charge of security at the Intel Developer Forum last fall, and we chatted about what Microsoft could do to fix things. He asked the right questions, and I told him the right answers, trust. Plus, throw everything you have out and start again. He didn't get it. No, more than that, he was impervious to the things I was saying to him, the culture is so ingrained that the truth can't penetrate it. Microsoft cannot fix the 'bugs' that lead to security problems because they are not bugs, they are design choices. When faced with Java, Microsoft reacted with ActiveX. That, it claimed, could do everything that Java could not, because Java was in a 'sandbox', and programs could not get out.

The fact remains that Microsoft's entire infrastructure is based on fundamentally flawed designs, not buggy code. These designs can't be changed.

To change them, Microsoft would have to dump all existing APIs and break compatibility with everything up till now. If Microsoft does do this, it will have the opportunity to fix the designs that plague its product lineup.

I doubt it will. Even .Net, the new secure infrastructure, and built with security in mind, lets you have access to the 'old ways'. Yes, you are not supposed to, but people somehow do, and hackers will. Microsoft and its customer are addicted to backwards compatibility in a way that makes a heroin addict look silly.

And if Microsoft does change its ways, what incentive will you have to stick with Microsoft? If you have to start over from scratch to build your app in this new, secure Microsoft environment, will you pay the hundreds or thousands of dollars to go the Microsoft route, or the $0 to go with Linux?

Starting from Scratch
Starting over from scratch nullifies the one advantage that Microsoft has, complete code and a trained staff. Migration and retraining features prominently in most Microsoft white papers, and if it has to throw all that away, what chance does it have?

In light of the won't do and can't do, Microsoft sits there, and watches its market share begin to erode. That's happening slowly at first, but the snowball is rolling. A few people are starting to look up the hill and notice this big thing barreling down at them, and some are bright enough to step out of the way.

The big industry change is happening, and we are at the inflection point. Watch closely people, and carefully read each and every press release. If you can see the big picture, this is one shift that won't be a surprise in hindsight.

Uh, with a sample size of 400,000, you get a statistically valid result without "scientific sampling", unless he has "cherry-picked" a subset of his entire data set to present--which I doubt is the case.

Uh, it's not necessarily a statistically valid result unless he is trying to measure the opinion only of those who visit his site and responded to the poll.

Here's an example: What is the value of a poll of a million respondents to a poll at mtv.com? It depends on whether the question is "Which is your favorite top ten MTV video?" (valid results) or "Which music do you prefer, pop or classical?" (invalid results, because the poll will be taken by more pop fans than classical).

Imagine a poll at PlannedParenthood.com asking whether abortion is murder. If it has 30 results or 3 million results, it's skewed to reflect the views of the kind of person who answers the poll.

One more example: "Which operating system do you prefer?" A 'poll' with 400,000 respondents at 'slashdot.org' will skew towards linux, while a similar poll at 'newbiehousewives.com' would skew towards microsoft.

Oh, I wish that were true. I'm still waiting for pro-sound, multitracking, editing and mastering for audio apps are out for linux. There's nothing out now that can compare with Native Wave or Cakewalk Pro 9.0 and up in the Linux world. I'm waiting/hoping/looking but it ain't happening yet.

There's not even proper driver support for all my hardware for me to consider using Linux yet. I wanna...lawd, how I wanna get away from M$. But till the apps are out that get done what I need...I'm stuck with Billy and his Redmond gang.

Yeah, but this isn't a poll. There ARE no questions asked, so the results can't be "slanted" by choice of verbiage. There is no question of "responding" to anything--so the "opinion" gleaned from the data are about a unbiased as it is possible to get.

This is a compilation of visits/hits to a website that is about hobby-related items, so any possible "bias" toward Windows/Linux/Mac is also negated (I've been to Al's website, so I know what's there)

What the data shows is a huge preponderance of people use the various flavors of Internet Explorer, which implies that the vast majority of visitors are running Windows as their desktop operating system.

And with a sample size of 400,000, the statistics will still be valid even if there are multiple visits by the same people (which there very likely is).

"There's not even proper driver support for all my hardware for me to consider using Linux yet. I wanna...lawd, how I wanna get away from M$. But till the apps are out that get done what I need...I'm stuck with Billy and his Redmond gang."

Ditto that. At this point, the only practical option I see is to run Linux and then run Windows apps "inside" Linux using Netraverse's "Win4Lin" or similar (and yes, I know all about WINE and Codeweaver's "Crossover Office"--WINE simply "isn't ready for prime time", and Crossover doesn't really support much more). "Win4Lin" has pretty much run everything I have thrown at it.

I wish to gawd that someone like IBM would take WINE by the nape of the neck and get it to work on a wide variety of apps.

But that doesn't fix the hardware driver problem---:^(.

But that doesn't fix the hardware driver problem---:^(.

Linux on the desktop is just starting. We are years away from having mass market suppliers give a damn about it, if they ever do. Anybody who thinks that linux is going to open up like a rosebud and have 15 years' worth of desktop software development available for it, like Windows does today, is not being realistic. For the foreseeable future, most desktop linux is going to be high-seat-count dedicated applications, like where somebody has 3200 stores running a sales and inventory system all day... and that's all they want 'em to run.

There is probably some segment of governments, Europeans, and people who hate Microsoft that will collectively form the core of a nascent linux office/productivity desktop software market. How fast it will grow from there, and how big it will get, is Bill Gates' problem, not ours.

Instead of creating software chaos once again, we must focus on fixing the problems within the Microsoft operating system.

Beggin' yer pardon, sorr, but who's "we"? If there are problems within the Microsoft operating system, it's up to Microsoft to fix them, not you and the little paper-clip guy in your pocket.

And don't be painting Linux to be a return to chaos... it's not like Unix is something new and different, after all.

I'm aware of them and have looked them all over and feel they are the best sound apps out for Linux right now. However, they are NOOOO where near ready to handle what I need them to handle. In Cakewalk I am able to easily multitrack over 100 stereo digital tracks at a time.

Appreciate you looking for me though:)

One day...some enterprising smart person will port Cakewalk or something similar to Linux and the world will be a brighter place!

I can appreciate how a frustrating experience has quite rightly set your frame of mind, but I can't agree that Microsoft has not improved. It is infinitely easier to diagnose and fix problems on WindowsXP than it was on Windows95, etc. This is even more true when one considers how frequently we add something new to our systems today vs the pre-Web era.

Linux makes sense as a WAN server and may well survive in some niche. However, niche market success is NOT the problem Microsoft is solving. If and when Linux attempts to compete by "doing it all" they are in for some nasty surprises.

First, the larger your user base the less knowledgable your average user. You're probably savvy enough to go find the right file to tweak to get Linux working. Most people are not, and never will be.

Second, it's a real bitch to achieve backward compatibility with 100M installed machines running 100,000s of not-so-well-behaved apps. Who's going to do the dirty setup/installer work with it's endless hours of testing and retesting? Those open source "students"...unuh. Sun and Apple just dodge this problem rather than solve it, and by doing so limit their growth. Customers don't want to "start over".

This ends my comments re Microsoft. Yeah, they're far from perfect, but I think they're working on a problem of a scale that none of their competitors are even attempting and moving forward successfully. I respect that.

BTW, I was a Unix sysadmin for many years, and do appreciate the many important ways in which Unix moved the computer world forward. But, it also showed me first hand the limits of totally open ownership, and unless Linux (or whoever) solves this problem, it is my belief that Microsoft will remain immensely powerful.

Good luck to you.

YES, My XP-P is a lot better than earlier Windows etc.

And I'm thankful for the improvements.

And, I recognize that the complexities abound--which make troubleshooting a real challenge. But now, especially, with automatic error reports back to Microsoft--they should be doing a LOT BETTER STILL than they are.

Bill G has cash set aside to run MS for 7 years without any other income.

He's not a pauper. Nor are the rest of the leaders.

They COULD have AND STILL COULD AFFORD to put a LOT more $$$ into insuring a minimum of hassles for the customers.

Instead, they reportedly play a LOT of very, very ugly games with both competition and customers. In Taiwan, they are thought of as akin to the devil incarnate. The Chinese don't have quite the negatives associated with such tactics as we do because they are so used to evil emporers using them. But that's still no reason for MS to persist in really dastardly ways of doing business.

Sometimes I wonder how many suicides MS software has been responsible for. I figure it has to be more than a few, a lot more.

But there are inroads both ways. There is no dynamic mass emigration to either source. I administer systems in an AIX only shop, so I don't consider myself biased. However, I have seen end-users migrate desktops to Linux, and go back 6 months later, when that particular admin left for another position. That aside, the tricky accounting he implies MS is doing is simply asset management, not necessarily some dark plot. Not everything MS is one. Hey, I say if Linux is doing what you need done, great, same for Windows.

Sorry to offend you. I was backing up my comment with FACTS!

Anecdotal facts that are not scientifically sampled.

VA's web stats are scientific enough to be pertinent to the topic of the article and the subsequent discussion.

If you do some research on web development sites, you'll see dozens of other data collections with similar results, (i.e. MSIE is being used by well over 90% of internet users.)

The stats are important to developers because it is a PITA to write extra code for multiple browsers using older standards. Many web developers are ignoring the needs of browsers older than MSIE 5.x, and off-brand browsers that go tilt on XHTML, and they can do that with little risk to their target market.

Just because someone tracks and uses the data doesn't mean they are a fan of Microsoft; it just means they are paying attention to their market, and using that information to stay in business.

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