Market Adjusts in more than Asia

David Coursey at eWeeek argues that despite the loss of the final dissenter to the DOJ Antitrust case against Microsoft – there is a change coming. Davids argument is that Microsoft, having vacated its once powerful “we are the lowest cost or at least most features bang for your buck” position – has opened itself up to market attacks and therefore fundamental adjustments in Asia and other still emerging markets.

One could cite the XP-lite and pricing changes in Thailand as test markets for the new realities facing Microsoft. But I would add another 3 dimensions to the Open Source advantage over Microsoft and therefore for the market ever so slowly correcting for predatory monopolistic practices. First, having Open Source, Bugzilla and very fast patch/update cycles, Open Source is miles ahead of EULA and patch-when-we-deem-ready. Second, Open Source has various semi-open community processes for determining where and how new update and developments are made. Ironically, Javas Community Process is one of the better models despite all the “its not pure Open Source bleatings by IBM, Raymond, Stallman et alia”. Its miles ahead of closed door and you-must-open -the-kimono-in-order-to-get-API-info demands from Redmond.

Finally, Redmond and Open Source are moving in opposite directions on expanding markets for 3rd party participants. Microsoft used to court ISV developers offering marketing dollars and co-op deals plus development tool aids. Now that .NET is becoming .BUST Microsoft has just started returning to those roots. Tech Ed Europe being the “mea culpa for arrogance” meeting with developers. But the fundamental fact is that Microsoft is entering just about every Windows market with significant revenues and their target is not just market leadership but dominant 90%++ market shares as in desktop OS, mail, Office Suite, etc, etc.

90%++ marketshare is literally zero-sum. For Microsoft to win all you competitors have to lose. Microsoft cant even afford to leave any 3rd party participants alive for fear they will develop innovations that will gain new market prominence. 3rd party participants are only allowed in stable, declining or dormant market segments. And even in those, Microsoft watches competitors like a predatory cat waiting to cull the field of the most promising prey.

This has happened in PC Games, Windows OLAP/BI/Report writing, PC project management, Office Suites, etc. In contrast, Open Source started with the pure GPL, GNU Public License, which forces all organizations to give back to the community any software modifications and innovations. Any revenues had to be derived from tiny distribution fees and/or support services. This is not a bad model for some software markets; but it is not as effective in markets where substantial innovation is required or where new standards need to be enforced. Fortunately with Open Source organizations like Apache, BSD, Eclipse, JBoss, MySQL, NetBeans, PHP, Trolltech, and others – new models for Open Source are being explored that give original players and 3rd parties opportunities to make revenues on their innovations while keeping the source open and responsiveness to the community as key operating dimension of these new Open Source organizations.

So I agree with David, a reckoning is coming unless the zero-sum, 90%++ market share leopard changes its spots.