In reading through Microsoft’s annual report, I’m struck by how far the company has come in appreciating the threat that open source brings to Redmond. I’m also shocked by just how ill-informed the company continues to be with regard to open source as a business strategy. Steve Ballmer has revealed this before in his quips about “Open source won’t pay our bills,” but here Microsoft has managed to enshrine its ignorance in a public document:

Our business model has been based upon customers paying a fee to license software that we develop and distribute. Under this license-based software model, software developers bear the costs of converting original ideas into software products through investments in research and development, offsetting these costs with the revenue received from the distribution of their products. Certain “open source” software business models challenge our license-based software model….

A number of commercial firms compete with us using an open source business model by modifying and then distributing open source software to end users at nominal cost and earning revenue on complementary services and products. These firms don’t bear the full costs of research and development for the software. Some of these firms might build upon Microsoft ideas that we provide to them free or at low royalties in connection with our interoperability initiatives. To the extent open source software gains increasing market acceptance, our sales, revenue and operating margins might decline.

Yes to that last point, but no to Microsoft’s earlier point about R&D costs (as well as its throwaway line that open source is building on Microsoft’s ideas. This is undoubtedly true in some areas, but it also goes the other way, which Microsoft fails to acknowledge). Unless Microsoft is reserving that commentary exclusively for Red Hat and Novell and others like them that build on a community-developed platform like Linux, Microsoft’s comments couldn’t stray any farther from the mark.

For most open-source companies, we spend significantly more of our money on research and development than Microsoft and its proprietary ilk do. That’s one of the primary selling points for open source: We spend less on sales and marketing and more on developing our products.

Microsoft’s response to competition from open source?

… Source:The Open Road

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First it was the Affero General Public License that Google banned from its Google Code site, an open-source code hosting site. Google contended that it didn’t want to encourage license proliferation by accepting projects using licenses that don’t have widespread use and acceptance.

This week, however, Google nixed a highly popular, important license license: Mozilla Public License….

Source:The Open Road

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As an employee of Alfresco, I’m somewhat biased in reporting that Alfresco yesterday announced full SharePoint integration with the Alfresco 3.0 Labs release. Even so, I think it’s highly significant precisely because of what it says about the importance of Microsoft’s continued battles with the European Union over proprietary protocols.

Most that reported on the release missed this. OStatic, however, got it dead on:

As part of complying with the EU’s demands, the company has released the specifications for the Microsoft Office interfaces, and now we’re seeing some of the benefits spill over into open source. Alfresco, which makes open source enterprise content management (ECM) software, has added SharePoint interoperability….This looks like a good move from Alfresco and lets hope the EU’s two-fisted stance toward Microsoft results in more of this kind of sharing.

Bingo, and bravo to Microsoft, whatever its intentions and pressures that resulted in opening up the SharePoint protocol. The net result is a large win for customers. Why?

Well, for the first time enterprises can get the benefits of SharePoint-esque functionality and interoperability without having to adopt Microsoft technologies wholesale. This is the other big news in Alfresco’s release, also mostly missed by the media. CMS Watch, however, nailed this aspect of the release, and points to the critical importance of getting out of the SharePoint thicket that Forrester criticizes before SharePoint and Office merge at the next release:

… Source:The Open Road

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The good news is that Mozilla’s popular Firefox browser is getting video support. The bad news is that you probably won’t notice.

Why? Because the video codec that’s coming to Firefox is not commonly used: Ogg Theora. Firefox will also be adding a new HTML tag to …

Source:The Open Road

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