2007 has barely begun, and already I've been asked to look back on 2006! The trends of 2006 are still playing out, and will continue to do so through the first quarter of 2007, making it harder than usual look into the crystal ball for the upcoming year. But in a few years, we will all look back at 2006 as the year everything changed again.
Agile methodologies cemented themselves in the development environments of companies of all sizes, helping to shape the year to come. With increased customer interaction early in the cycle, the reliance on continuous integration tools grew paramount, especially with the maturity of Cruise Control and Cruise Control .NET. Continuous integration will become a cornerstone software development practice, increasing the quality of software releases industry wide. That being said, 2007 will be the year that Cruise Control captures the continuous integration market. The ability to support most major and minor platforms for free will be nearly impossible to compete with.
This brings us to the second trend of 2007, the increased reliance of Open Source software in the revision control and software release fields. Across the industry, companies using CVS, RCS, and looking at Perforce will start the move to Subversion. Visual SourceSafe and Vault will continue to lose ground in their respective niches, while Subversion captures the customer base. The ease of use and integration into all three major operating systems (Windows, OSX, and Linux), combined with its price and stability will force companies to reduce their expenses through quality software. For the first time in nearly fifteen years, free revision control systems can again compete with commercial ones, and on any platform.
Speaking of platforms, the crystal ball holds one more platform surprise in 2007. Having finally (officially) moved to Intel, Apple has guaranteed an interesting year is ahead. Companies will start the groundwork for releasing software on the Mac, with many companies announcing OSX releases in 2007. The Mac will return as a viable platform for software releases as companies slowly move to the Mac OS. Movement will develop slowly at first, but definite groundwork will be laid out for a multi-platform future.
With a revolution year behind us, we have to ask ourselves if 2007 can be even half as groundbreaking as 2006. In truth, I don't know if it's possible to have another year like 2006 so soon on its heals. Either way, 2007 will certainly be an interesting year.
Thursday, December 20, 2007
Friday, August 24, 2007
Open source gets European boost
The European Commission has added its voice to the debate about the use of open source software.
A report funded by the Commission concludes that the software could offer considerable savings to organisations with little effect on their business.
The report found that in "almost all" cases long-term costs could be reduced by switching from proprietary software produced by firms such as Microsoft.
However, it warned that a move to open source could increase short term costs.
This would be largely be due to increased training for users of the software, said the authors of the report who are based at the United Nations University in Maastricht.
But some proprietary manufacturers such as Microsoft do not believe that open source always means cheaper. In 2004 the company launched a campaign called Get The Facts that gave examples of where its software was cheaper and more reliable than open source products.
Voluntary contribution
Open source software refers to software where the underlying programming code is made available to users to read, alter and improve. This is in contrast to proprietary software where a company controls the source code to prevent changes being made.
A great deal of open source software is produced and distributed for free by volunteer programmers, although some companies, such as Red Hat, do sell open source products and associated services to get them up and running.
The study estimates that just one-third of open source programs are produced by businesses in Europe.
Software made by volunteers includes operating systems, such as Linux, and Microsoft Office-like programs such as OpenOffice.org.
Open source programs are already used by many companies particularly to run web servers, the computers that store and deliver web pages.
According to the study, the number of existing open source programs already available would have cost firms 12 billion Euros (£8 billion) to produce.
It estimates that the available programs represent the equivalent of 131,000 programmer years.
"This represents at least 800 million Euros (£525 million) in voluntary contributions from programmers alone each year," the report said.
At the moment, the report said, public organisations were the dominant beneficiaries of this work.
To continue this uptake, the report recommends "correcting current policies and practices that implicitly or explicitly favour proprietary software".
As well as providing incentives to the open source industry it also recommends that schools start to introduce more of the software.
This would instil "an attitude towards information technology that favours the ability to create and actively participate rather than just consume," the report said.
This view echoes those of 111 UK MPs who signed an early day motion in December 2006 to support the use of open source in schools.
The motion also criticised the "outdated" methods used to purchase software for schools that locked them into buying proprietary software.
A report funded by the Commission concludes that the software could offer considerable savings to organisations with little effect on their business.
The report found that in "almost all" cases long-term costs could be reduced by switching from proprietary software produced by firms such as Microsoft.
However, it warned that a move to open source could increase short term costs.
This would be largely be due to increased training for users of the software, said the authors of the report who are based at the United Nations University in Maastricht.
But some proprietary manufacturers such as Microsoft do not believe that open source always means cheaper. In 2004 the company launched a campaign called Get The Facts that gave examples of where its software was cheaper and more reliable than open source products.
Voluntary contribution
Open source software refers to software where the underlying programming code is made available to users to read, alter and improve. This is in contrast to proprietary software where a company controls the source code to prevent changes being made.
A great deal of open source software is produced and distributed for free by volunteer programmers, although some companies, such as Red Hat, do sell open source products and associated services to get them up and running.
The study estimates that just one-third of open source programs are produced by businesses in Europe.
Software made by volunteers includes operating systems, such as Linux, and Microsoft Office-like programs such as OpenOffice.org.
Open source programs are already used by many companies particularly to run web servers, the computers that store and deliver web pages.
According to the study, the number of existing open source programs already available would have cost firms 12 billion Euros (£8 billion) to produce.
It estimates that the available programs represent the equivalent of 131,000 programmer years.
"This represents at least 800 million Euros (£525 million) in voluntary contributions from programmers alone each year," the report said.
At the moment, the report said, public organisations were the dominant beneficiaries of this work.
To continue this uptake, the report recommends "correcting current policies and practices that implicitly or explicitly favour proprietary software".
As well as providing incentives to the open source industry it also recommends that schools start to introduce more of the software.
This would instil "an attitude towards information technology that favours the ability to create and actively participate rather than just consume," the report said.
This view echoes those of 111 UK MPs who signed an early day motion in December 2006 to support the use of open source in schools.
The motion also criticised the "outdated" methods used to purchase software for schools that locked them into buying proprietary software.
Tuesday, July 10, 2007
The Microsoft/Novell Deal: Has It Divided The Linux Community?
When Microsoft and Novell announced that they would work together, Linux enthusiasts were shocked. How has the agreement affected the open-source community, and can it recover?
By Jacqueline Emigh InformationWeek
In November, 2006, Microsoft and Linux vendor Novell knocked the software industry for a loop with their multifaceted, multimillion dollar business agreement unveiled. However, the biggest effect may be on Linux, the open-source software operating environment that many companies (and some consumers) are increasingly adopting as an alternative to Microsoft's proprietary but pervasive Windows operating system.
Initially announced on news conference November 2, 2006, the deal called for Microsoft, long seen as an enemy by many Linux advocates, to start working hand-in-hand with Novell, producer of the SuSE Linux operating system, in areas that included licensing, support, and joint research and development around Windows/Linux interoperability.
Also under the agreement, the two software makers inked a software patents covenant stating that Microsoft won't be able to sue Novell's customers for any potential infringements of Microsoft's patents, and Novell won't be able to sue Microsoft's customers for potential infringements on Microsoft's patents.
Meanwhile, hundreds of millions of dollars will change hands between Microsoft and Novell over the next three years for software licensing and patent protection, with a net balance of $118 million going to Novell.
The deal does have supporters among industry analysts ISVs, and VARs, who foresee benefits to Novell and to the advance of Linux in the enterprise. "Novell needs to look at its opportunity to gain Linux customers from highly Microsoft-loyal accounts. And when you consider the money, there'll be a lot of it going into Novell's coffers," said Raven Zachary, an analyst with The 451 Group.
Recognition by Microsoft lends more credibility to Novell as a second major Linux distributor (behind industry leader Red Hat Software), according to Adam Braunstein, an analyst at the Robert Frances Group. "No enterprise customer wants to get locked into a single distribution," Braunstein said.
The Linux Community ReactsBut what about the developers who create the actual Linux code, and who form the heart of what's known as the open source community? How will they be affected? As the calendar turns the corner into 2007, is this community of ISV and corporate developers, already split into hundreds of different distributions, only becoming more divided? Or conversely, is this community growing even more unified through joint opposition to the deal?
So far, the answer seems to be yes on both counts. By and large, Linux developers see the deal as an unwelcome intrusion by Microsoft, a huge and unabashedly proprietary vendor, into the open source world, where software development is highly collaborative, a lot of code is available free of charge, and vendor business models are frequently based more on service contracts than on software licensing.
Linux organizations that sounded disapproval for the Microsoft/Novell plan range from Red Hat to smaller Linux distributors such as Linspire and Mandriva, and open source projects such as Samba, a group that includes even some Novell employees. "I obviously can't speak for the entire community, but I see more banding together [against Microsoft] than divisiveness," said Nicholas Petreley, a professional open source consultant, author, and editor, and the creator of VarLinux.org.
But beyond shared distaste for Microsoft's perceived intrusion, reactions within the Linux community vary, from a cautious watchfulness to a conviction that the deal represents an intentional ploy by Microsoft to destroy the open source movement by pitting one Linux distributor — namely, Novell — against the rest of the Linux community. "[It] is clearly true [that] the agreement sets SuSE apart from the rest of the crowd. The Microsoft message here is clear. 'I can pick and choose among the players and bribe whomever I want,'" contended Francois Banchilhon, CEO of the French-based Mandriva.
By Jacqueline Emigh InformationWeek
In November, 2006, Microsoft and Linux vendor Novell knocked the software industry for a loop with their multifaceted, multimillion dollar business agreement unveiled. However, the biggest effect may be on Linux, the open-source software operating environment that many companies (and some consumers) are increasingly adopting as an alternative to Microsoft's proprietary but pervasive Windows operating system.
Initially announced on news conference November 2, 2006, the deal called for Microsoft, long seen as an enemy by many Linux advocates, to start working hand-in-hand with Novell, producer of the SuSE Linux operating system, in areas that included licensing, support, and joint research and development around Windows/Linux interoperability.
Also under the agreement, the two software makers inked a software patents covenant stating that Microsoft won't be able to sue Novell's customers for any potential infringements of Microsoft's patents, and Novell won't be able to sue Microsoft's customers for potential infringements on Microsoft's patents.
Meanwhile, hundreds of millions of dollars will change hands between Microsoft and Novell over the next three years for software licensing and patent protection, with a net balance of $118 million going to Novell.
The deal does have supporters among industry analysts ISVs, and VARs, who foresee benefits to Novell and to the advance of Linux in the enterprise. "Novell needs to look at its opportunity to gain Linux customers from highly Microsoft-loyal accounts. And when you consider the money, there'll be a lot of it going into Novell's coffers," said Raven Zachary, an analyst with The 451 Group.
Recognition by Microsoft lends more credibility to Novell as a second major Linux distributor (behind industry leader Red Hat Software), according to Adam Braunstein, an analyst at the Robert Frances Group. "No enterprise customer wants to get locked into a single distribution," Braunstein said.
The Linux Community ReactsBut what about the developers who create the actual Linux code, and who form the heart of what's known as the open source community? How will they be affected? As the calendar turns the corner into 2007, is this community of ISV and corporate developers, already split into hundreds of different distributions, only becoming more divided? Or conversely, is this community growing even more unified through joint opposition to the deal?
So far, the answer seems to be yes on both counts. By and large, Linux developers see the deal as an unwelcome intrusion by Microsoft, a huge and unabashedly proprietary vendor, into the open source world, where software development is highly collaborative, a lot of code is available free of charge, and vendor business models are frequently based more on service contracts than on software licensing.
Linux organizations that sounded disapproval for the Microsoft/Novell plan range from Red Hat to smaller Linux distributors such as Linspire and Mandriva, and open source projects such as Samba, a group that includes even some Novell employees. "I obviously can't speak for the entire community, but I see more banding together [against Microsoft] than divisiveness," said Nicholas Petreley, a professional open source consultant, author, and editor, and the creator of VarLinux.org.
But beyond shared distaste for Microsoft's perceived intrusion, reactions within the Linux community vary, from a cautious watchfulness to a conviction that the deal represents an intentional ploy by Microsoft to destroy the open source movement by pitting one Linux distributor — namely, Novell — against the rest of the Linux community. "[It] is clearly true [that] the agreement sets SuSE apart from the rest of the crowd. The Microsoft message here is clear. 'I can pick and choose among the players and bribe whomever I want,'" contended Francois Banchilhon, CEO of the French-based Mandriva.
Wednesday, May 02, 2007
The top five open source stories to follow in 2006
Following a year that bore witness to the proliferation of open source business applications and increased adoption of Linux across the board, experts predict that 2006 will be another big year for open source.
There's been a lot going on, including a hard-at-work open source community ironing out GNU General Public License (GPL) loopholes, plus open source virtualization hitting the mainstream and Sun Microsystems and Novell Inc. anxiously waiting to see if their open source gambits pay off. Indeed, the experts promise plenty more open source news to follow in 2006.
TechTarget spoke to a couple of IT industry experts to get their predictions for the five biggest open source trends and stories to follow in 2006. In no particular order of importance, here's what they had to say:
You can expect the GPL debate to go on for quite some time, but it's really going to take off in 2006 Tony Iams,vice president and operating systems analyst, Ideas International
1. Debate will heat up over GPL version 3
Discussions over exactly what the next version of the GPL should look like have already begun, and experts say the debate could get fairly contentious as 2006 unfolds.
At issue will be what some believe are loopholes in current versions of the license -- loopholes that some think allow vendors to get around the "inconvenience" of having to reveal source code.
Created by Richard Stallman of the Free Software Foundation, the GPL is one of the major open source software licenses. It lists the terms and conditions for copying, modifying and distributing free software.
"The GPL version 3 is being developed through an open process, whereas, in the past, the GPL was pretty much developed by individuals and sort of presented to the community," said Tony Iams, a vice president and operating systems analyst with Ideas International in New York City.
Iams said one of the major issues to be debated centers on whether software makers should be forced to reveal source code for applications that are only available on the Web.
"Right now under the terms of the GPL code, you do not have to release the source code unless you distribute the software," Iams said. "But some people are saying that if you're going to take advantage of open source programs to create a really attractive and profitable Internet service, you should also have to make those modifications available."
"You can expect the GPL debate to go on for quite some time, but it's really going to take off in 2006," Iams added.
2. Open source virtualization for the masses
There was a lot of talk about Xen open source server virtualization over the past year, but with Xen version 3 set to debut and vendors like Novell and Red Hat planning to bundle it with their Linux distributions, 2006 could be the year that Xen truly hits the mainstream.
"The parties that are going to be most interested in this are people that run data centers and want to consolidate, improve the way they run their data centers and lower their cost of ownership through better utilization and so forth," Iams said. "Those people are very closely looking at virtualization to help them achieve some of those goals."
Proprietary virtualization technology was pushed into the mainstream by VMware Inc., and later by Microsoft with its Virtual Server. But Iams said those well established players could be significantly disrupted when Xen is included with Red Hat's Linux and Novell's SuSE.
"The disruption is really going to be at the foundation of the virtualization stack with the basic ability to run multiple IS operating systems on a single server [becoming] more or less a commodity," Iams said. "That's going to push the differentiation to the upper levels of the virtualization stack, notably to virtualization management. That's where you're going to see lots of investments and activity in managing virtualized infrastructures."
3. Sun and Novell: Will their open source bets pay off?
Sun Microsystems and Novell have reshaped their respective businesses around open source over the past year, and in 2006, the world will find out if their gambits pay off.
Experts say those two companies are worth watching -- and even rooting for -- in 2006, because their success will have major implications for both IT pros and the industry as a whole. Those implications, says Iams, have to do with choice.
For Novell -- a traditionally proprietary vendor that has refocused its business on open source SuSE Linux -- success means that users will have a greater choice when it comes to Linux vendors.
For Sun -- a company that has opened up all of its source code and is now focusing on providing support for its flagship Solaris operating system -- success means that users will have a viable, high-end and Unix-based alternative to Linux.
"The industry should hope that this pays off, because this would be further affirmation that the open source business model is truly viable, and not just for pioneers like Red Hat and JBoss, but also for the established proprietary players," Iams said.
4. A growing open source challenge to MS Exchange?
When it comes to corporate e-mail systems, the combination of MS Outlook and MS Exchange are king. But more and more open source e-mail vendors -- such as Scalix Corp. -- are emerging to try and take a bigger share of the e-mail market, at least on the back end.
As 2006 unfolds, said Michael Osterman, principal of Osterman Research Inc. in Black Diamond, Wash., those vendors will focus on providing systems administrators with the functionality they need to swap out Exchange for open source on the back end, while keeping Outlook on the clients.
And keeping Outlook on the client, he said, is the key to building e-mail market share, because users are reluctant to take on new desktop e-mail applications. "I think that by and large [open source e-mail providers] have a growing market," said Osterman, whose firm focuses on enterprise messaging issues. "I anticipate that there is going to be increased use of open source e-mail [in 2006]."
5. Desktop Linux ready for take off -- again
Although it has been said before, experts predict that desktop Linux will gain a stronger foothold in corporate America in the coming year.
But this time, says Iams, don't expect an explosion in desktop Linux adoption rates, but rather slow and steady adoption.
Iams said this sure but gradual move forward for desktop Linux in 2006 will take place with the help of a number of software companies.
Linspire Inc. will continue innovating desktop Linux for the consumer crowd while Mandriva, a Linux and open source products, technology and services company, continues putting heavy focus on corporate desktops. In the embedded space, Iams said MontaVista Software Inc. will be hard at work pushing Linux into clients and mobile phones.
"Every year someone makes [the big desktop Linux] prediction, though it never seems to achieve quite the momentum that the optimists have predicted," Iams said. "But every year moves the bar forward a little bit, and so I expect that to continue this year."
There's been a lot going on, including a hard-at-work open source community ironing out GNU General Public License (GPL) loopholes, plus open source virtualization hitting the mainstream and Sun Microsystems and Novell Inc. anxiously waiting to see if their open source gambits pay off. Indeed, the experts promise plenty more open source news to follow in 2006.
TechTarget spoke to a couple of IT industry experts to get their predictions for the five biggest open source trends and stories to follow in 2006. In no particular order of importance, here's what they had to say:
You can expect the GPL debate to go on for quite some time, but it's really going to take off in 2006 Tony Iams,vice president and operating systems analyst, Ideas International
1. Debate will heat up over GPL version 3
Discussions over exactly what the next version of the GPL should look like have already begun, and experts say the debate could get fairly contentious as 2006 unfolds.
At issue will be what some believe are loopholes in current versions of the license -- loopholes that some think allow vendors to get around the "inconvenience" of having to reveal source code.
Created by Richard Stallman of the Free Software Foundation, the GPL is one of the major open source software licenses. It lists the terms and conditions for copying, modifying and distributing free software.
"The GPL version 3 is being developed through an open process, whereas, in the past, the GPL was pretty much developed by individuals and sort of presented to the community," said Tony Iams, a vice president and operating systems analyst with Ideas International in New York City.
Iams said one of the major issues to be debated centers on whether software makers should be forced to reveal source code for applications that are only available on the Web.
"Right now under the terms of the GPL code, you do not have to release the source code unless you distribute the software," Iams said. "But some people are saying that if you're going to take advantage of open source programs to create a really attractive and profitable Internet service, you should also have to make those modifications available."
"You can expect the GPL debate to go on for quite some time, but it's really going to take off in 2006," Iams added.
2. Open source virtualization for the masses
There was a lot of talk about Xen open source server virtualization over the past year, but with Xen version 3 set to debut and vendors like Novell and Red Hat planning to bundle it with their Linux distributions, 2006 could be the year that Xen truly hits the mainstream.
"The parties that are going to be most interested in this are people that run data centers and want to consolidate, improve the way they run their data centers and lower their cost of ownership through better utilization and so forth," Iams said. "Those people are very closely looking at virtualization to help them achieve some of those goals."
Proprietary virtualization technology was pushed into the mainstream by VMware Inc., and later by Microsoft with its Virtual Server. But Iams said those well established players could be significantly disrupted when Xen is included with Red Hat's Linux and Novell's SuSE.
"The disruption is really going to be at the foundation of the virtualization stack with the basic ability to run multiple IS operating systems on a single server [becoming] more or less a commodity," Iams said. "That's going to push the differentiation to the upper levels of the virtualization stack, notably to virtualization management. That's where you're going to see lots of investments and activity in managing virtualized infrastructures."
3. Sun and Novell: Will their open source bets pay off?
Sun Microsystems and Novell have reshaped their respective businesses around open source over the past year, and in 2006, the world will find out if their gambits pay off.
Experts say those two companies are worth watching -- and even rooting for -- in 2006, because their success will have major implications for both IT pros and the industry as a whole. Those implications, says Iams, have to do with choice.
For Novell -- a traditionally proprietary vendor that has refocused its business on open source SuSE Linux -- success means that users will have a greater choice when it comes to Linux vendors.
For Sun -- a company that has opened up all of its source code and is now focusing on providing support for its flagship Solaris operating system -- success means that users will have a viable, high-end and Unix-based alternative to Linux.
"The industry should hope that this pays off, because this would be further affirmation that the open source business model is truly viable, and not just for pioneers like Red Hat and JBoss, but also for the established proprietary players," Iams said.
4. A growing open source challenge to MS Exchange?
When it comes to corporate e-mail systems, the combination of MS Outlook and MS Exchange are king. But more and more open source e-mail vendors -- such as Scalix Corp. -- are emerging to try and take a bigger share of the e-mail market, at least on the back end.
As 2006 unfolds, said Michael Osterman, principal of Osterman Research Inc. in Black Diamond, Wash., those vendors will focus on providing systems administrators with the functionality they need to swap out Exchange for open source on the back end, while keeping Outlook on the clients.
And keeping Outlook on the client, he said, is the key to building e-mail market share, because users are reluctant to take on new desktop e-mail applications. "I think that by and large [open source e-mail providers] have a growing market," said Osterman, whose firm focuses on enterprise messaging issues. "I anticipate that there is going to be increased use of open source e-mail [in 2006]."
5. Desktop Linux ready for take off -- again
Although it has been said before, experts predict that desktop Linux will gain a stronger foothold in corporate America in the coming year.
But this time, says Iams, don't expect an explosion in desktop Linux adoption rates, but rather slow and steady adoption.
Iams said this sure but gradual move forward for desktop Linux in 2006 will take place with the help of a number of software companies.
Linspire Inc. will continue innovating desktop Linux for the consumer crowd while Mandriva, a Linux and open source products, technology and services company, continues putting heavy focus on corporate desktops. In the embedded space, Iams said MontaVista Software Inc. will be hard at work pushing Linux into clients and mobile phones.
"Every year someone makes [the big desktop Linux] prediction, though it never seems to achieve quite the momentum that the optimists have predicted," Iams said. "But every year moves the bar forward a little bit, and so I expect that to continue this year."
Monday, April 02, 2007
Microsoft vs. Open Source: Who Will Win?
Want to get a heated debate going among technologists? Ask them this question: Can the open source software movement defeat (or severely cripple) Microsoft in the marketplace?
With little academic attention focused on this question, Harvard Business School professors Pankaj Ghemawat and Ramon Casadesus-Masanell decided to dive in. Most research to date into the OSS movement has focused on the organization and management issues surrounding OSS. Ghemawat and Casadesus-Masanell chose to explore the fundamental competitive dynamics question: Will OSS ever displace traditional software from its market leadership position?
"We believe that there is still a great deal of confusion and puzzlement on how this competitive battle will develop," say the authors of the academic paper Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows, which has just been accepted for publication in a special issue of Management Science.
Ultimately, the authors believe, neither side is likely to be forced from the battlefield—Microsoft has too much market share and OSS offers too many benefits for users. But there are strategies each can use successfully against the other, as they detail in this e-mail interview.
Sean Silverthorne: Why should OSS ever displace traditional software?
Ramon Casadesus-Masanell and Pankaj Ghemawat: One main advantage of open source software is that because users can modify the code directly (as they encounter problems or have new ideas on how to improve it), the development cycle is significantly shorter. Proponents of OSS claim that if this demand-side learning (as we call it) is sufficiently strong, OSS will oust traditional software. In addition, software engineers claim that the better architecture of most OSS projects make them a potentially superior product, adding to the probability of success.
However, OSS has disadvantages too. Most importantly, it comes from behind in terms of market share (installed base). Because the value of an operating system depends critically on the number of users, traditional software has an advantage. Clearly, a larger installed base implies that there will be stronger direct and indirect network effects, and this will enhance the value of the operating system to current and potential users. In addition, a larger installed base also implies that there will be more feedback on bugs and more suggestions for new features.
Our paper introduces a dynamic mixed duopoly model in which a profit-maximizing competitor (Microsoft) interacts with a competitor that prices at zero (Linux), with the installed base affecting their relative values over time. We use a formal model to ask what conditions are needed for Linux to take over Windows. The questions that we address are: Is Linux's superior demand-side learning sufficient to win out? What is the effect of forced procurement by governments and some large corporations on the long-run equilibrium? How do cost asymmetries play out? Can Microsoft use piracy strategically to improve its market position?
From a managerial perspective, these are significant questions. If it turns out that OSS will incontestably displace traditional software, software firms need to adapt as quickly as possible to the new competitive landscape by, for example, incorporating some aspects of the open source development model, or else be ready to exit. In fact, the model suggests ways in which the likelihood of OSS winning out can be minimized (see below). If, to the contrary, OSS turns out not to be a threat to the traditional model, firms should not waste time and attention trying to figure out ways to fight this battle.
Q: Could you summarize your results?
A: First of all, let us make a caveat regarding our approach. Our methodology is formal economic modelling. What this means is that we construct a stylized mathematical model of the relationship. The model captures what we believe are the most important features of the Linux-Windows competitive battle (faster demand-side learning on the part of Linux and an initial installed base advantage for Windows), but makes important assumptions regarding other aspects. Without these simplifications, the model would not be tractable and it would not be possible to obtain results. After having analyzed the base model, we relax some of these assumptions.
Harnessing demand-side learning more efficiently is not sufficient for Linux to win the competitive battle against Windows.
Our main result is that in the absence of cost asymmetries and as long as Windows has a first-mover advantage (a larger installed base at time zero), Linux never displaces Windows of its leadership position. This result holds true regardless of the strength of Linux's demand-side learning. Furthermore, the result persists regardless of the intrinsically better design and potential differential value of Linux. In other words, harnessing demand-side learning more efficiently is not sufficient for Linux to win the competitive battle against Windows.
Having obtained this basic result, we investigate the conditions that will warrant that Linux ends up forcing Windows out. We do this by modifying the model in two ways. First of all, we look at the effect of having buyers such as governments and some large corporations committed to deployment of Linux in their organizations. We call such buyers strategic. In addition to cost-related reasons, governments back Linux because having access to the source code allows them to verify that sensitive data is treated securely. Binary code makes it hard to figure out who has access to information flowing in a network. Companies such as IBM, in contrast, back Linux because they see in OSS one way to diminish Microsoft's dominance. We find that the presence of strategic buyers together with Linux's sufficiently strong demand-side learning results in Windows being driven out of the market. This may be one main reason why Microsoft has been providing chunks of Windows' source code to governments.
Second, we look at the role of cost asymmetries. In the base model we assume that the cost structures of Windows and Linux for the development, distribution, and support of software coincide. A natural question is then whether the central result that Windows survives in the long-run equilibrium regardless of the speed of Linux's demand-side learning persists if there are cost asymmetries. We find that because OSS implies lower profits for Microsoft, the larger the cost differences are between Linux and Windows, the less able Microsoft is to guarantee the survival of Windows.
We also show that it is not all bad news to Microsoft. We analyze the effect of having forward-looking buyers and the presence of piracy, and conclude that both benefit Microsoft.
We question the effectiveness of influencing forward-looking buyers' perceptions on the value of an operating system. The model suggests that the more forward-looking buyers are, the more advantageous it is to use fear, uncertainty, and doubt (FUD) tactics to drive the competing system out. Consider SCO, a small "vulture" firm that had bought up the intellectual property rights to a particular version of Unix and threatened Linux users with lawsuits over infringement of those rights unless they agree to pay substantial licensing fees. IBM, which was one of the prime corporate sponsors of Linux as well as the target of a lawsuit by SCO that sought $1 billion in damages, alleged in mid-2003 that SCO was in cahoots with Microsoft. Our model indicates that if buyers are sufficiently forward-looking, such actions may jeopardize the ability of Linux to continue as an effective competitor in the operating system space.
We also look at the effect of piracy and ask whether piracy can ever be beneficial to Microsoft. This extension was motivated by analyzing data on a cross-section of countries on Linux penetration and piracy rates. We found that in countries where piracy is highest, Linux has the lowest penetration rate. The model shows that Microsoft can use piracy as an effective tool to price discriminate, and that piracy may even result in higher profits to Microsoft!
Finally, the paper investigates the societal welfare consequences of OSS availability by comparing different industry structures (monopoly and duopoly). We find that while a monopoly of Linux is always preferable (from the point of view of societal welfare) to a Windows monopoly, it is ambiguous whether a duopoly Linux-Windows is better than a Windows monopoly.
The basic trade-off is the following: With a duopoly, more individuals and organizations use PCs because prices are lower, and this raises welfare. However, with a duopoly, no operating system ends up exploiting fully its potential because developers' efforts wind up divided between the two systems. However, with a monopoly, the efforts to develop new software and improve the platform are directed towards one system only and this may turn out to be better from a social welfare perspective.
Q: In general, what surprised you about the results? What assumptions did you have going in that didn't hold up?
A: When we began the project, we thought that network effects and demand-side learning would result in Linux forcing Windows out. After all, we reasoned, if Windows is sold at a positive price and Linux is free, there will always be Linux users, and if the strength of Linux's network effect is large, the value of Linux to prospective users should eventually become larger than that of Windows.
Well… we were wrong (and this illustrates the usefulness of developing a formal model). What we had missed is that Microsoft's initial advantage (larger installed base) together with its pricing power allow the company to price strategically to control Linux's market share going forward. By lowering the price of Windows, the demand for Linux shrinks to the point where Linux is not a threat to the survival of Windows. The model also shows that a "milking strategy" (setting high prices in the short term and leaving the market at some point in the future) is not desirable to Microsoft. The reason is that if Microsoft follows such a strategy, as the last period becomes closer and closer, the relative benefit of abandoning it and lowering prices to survive a few more periods increases dramatically.
The model shows that Microsoft can use piracy as an effective tool to price discriminate, and that piracy may even result in higher profits to Microsoft!
The "Windows persistence" result turns out to be robust to different specifications of the model. In fact, in the first few months into the project we had developed several alternative models and every one of them yielded this very same finding.
In addition to this main result, we were also surprised to find that piracy may end up increasing Microsoft's profits. To understand why, notice that there are two types of pirates: those who would not have bought Windows in the first place because it is too expensive, and those who would have bought Windows but now decide to pirate it. The first category increases Windows' installed base without affecting sales. As a consequence, this group increases the value of Windows. And thanks to these pirates, Microsoft is able to set higher prices in the future (because the value of the system goes up). In addition, having these pirates means that Linux's installed base does not grow as much as it would have if piracy weren't there. The second type of pirates (those who in the absence of piracy would have bought Windows) reduces Windows' sales and profit. Thus, if the proportion of first-type pirates is sufficiently large, Microsoft's profits will increase with piracy.
Finally, the social welfare result that a Windows monopoly is not always worse than a Linux-Windows monopoly was also unexpected. This questions the social desirability of policies aimed at guaranteeing Linux's survival.
Q: You mention in the paper that the model is not to be taken as a literal model of the Linux/Microsoft competition. But can you say anything about why Linux has enjoyed success against Microsoft?
A: Linux's success against Microsoft is still relative. In the client space, Windows is the undisputable leader, and in the server space, Linux and Windows have both been gaining positions for the past ten years. The big losers are Novell, Unix, Solaris… everybody except Linux and Windows.
Despite this, Microsoft is visibly concerned about Linux's upsurge. The Halloween memos (see http://www.opensource.org/halloween/) are an obvious testimony of this concern: "OSS poses a direct, short-term revenue and platform threat to Microsoft, particularly in server space. Additionally, the intrinsic parallelism and free idea exchange in OSS has benefits that are not replicable with our current licensing model and therefore present a long-term developer mindshare threat."
Microsoft has a great deal to lose if Linux wins the operating systems battle. Microsoft is a software company, and a defeat in operating systems would point to the vulnerability of its entire business portfolio. In addition, the operating systems group is one of Microsoft's biggest revenue generators. Moreover, to a large extent Microsoft's sustained success over time in such a dreadfully rugged landscape has been due to its dominant position in operating systems. It is well known that Microsoft won the browser wars leveraging its dominant position in client operating systems. And the same will happen in the media player space unless the American or European antitrust authorities prevent it. We expect Microsoft to put all its ammunition to fight this battle.
Part of the reason why Linux has made significant inroads is the determination of Richard Stallman and the Free Software Foundation to have a free (as in freedom) operating system. According to Stallman, application software will never be truly free unless there is a free operating system that supports it. Thus, since the moment Linus Torvalds and Richard Stallman joined forces, a big chunk of the foundation's efforts have been directed at building a free operating system.
Then there are some large corporations and governments backing the development of Linux. These players use Linux as a way to curb Microsoft's dominance. This support is important because there are tedious portions of the code that would rarely be developed spontaneously by members of the Linux-developer community.
Q: From your modelling, what can Microsoft do strategically to remain competitive against a product that is argued to be of better quality, is updated more frequently, and is free?
A: A few actions that the model suggests Microsoft could do to remain competitive are:
Increase its own demand-side learning.
Listen to the demands of the user community to better exploit the benefits of demand-side learning. Microsoft must facilitate communication between the user base and the company to have prompt feedback on the performance of its products.
Make an effort to incorporate improvements in the code (fix bugs and introduce new features) as soon as possible.
Reward those who propose improvements for the code. At the very least, Microsoft could publicly acknowledge those who proposed new features or discovered bugs.
Feed its direct and indirect network effects.
Support as much as possible the independent software vendor community so that the quantity and quality of complements is substantially above that of Linux.
Encourage competition between the different ISVs. The lower the prices of applications, the more appealing the Microsoft system will be.
Price discriminate. Give Windows and applications away to schools and universities so that users build their file libraries on Microsoft, not Linux.
Minimize the number of strategic buyers.
Let governments access the source code and give guarantees that sensitive data is treated confidentially.
Price discriminate. Give binary away to organizations and individuals who are not willing to spend money on Windows but who would be willing to use Linux because it is free.
Reduce costs to be able to sustain long periods of time with low prices.
Decrease Linux's demand-side learning.
Because the way to do this involves some questionable (from a legal point of view) actions, we will refrain from suggesting specifics.
Lessen Linux's direct and indirect network effects.
Make it as hard as possible for Windows applications to work on Linux.
Same for MS Office documents.
"Promote" Linux's code forking.
Infuse fear, uncertainty, and doubt into the Linux user community. For this to work, the statements must be perceived as credible. Credibility requires some past FUD announcements to be realized.
Q: Is there a scenario where Linux could be kicked out of the market by Microsoft?
A: Strictly speaking, within our model the only way in which Microsoft can get rid of Linux is by setting the price at zero. But, even if Microsoft did that, the company would still be selling MS Office for a positive price. Thus, we conjecture that even in this case, there would be people developing and using Linux.
The more important question is: What motivates developers to contribute to open source projects in the first place? As long as the drivers are there, Linux will persist. Given that Linux was born in 1992 in an industry already dominated by Microsoft, and given that the financial motive is secondary, it will be very hard for anyone to oust Linux.
The organizational stream of research on OSS has identified several drivers of motivation to contribute to open source projects. For Microsoft to have a chance to kick Linux out of the market, it needs to successfully fight them.
First, some developers see software as scientific knowledge to be shared "like the sharing of recipes among cooks." In fact, some describe software developers more like artists seeking fun, challenge, and beauty in their work than like calculative, square-minded engineers. Second, some individuals find it fun to go against Microsoft. As the OSS/free software movement gains momentum and developers foresee that victory is within reach, they increase their effort to accomplish this. Third, because most OSS projects have a log file listing all contributors to the code, some developers find it desirable to participate in OSS projects to signal their ability and to enhance their chances of promotion and professional advancement. Finally, user-developers sometimes fix bugs that they find and then release the improved code so that everybody can benefit.
It will be very hard for anyone to oust Linux.
To the motivations of independent developers to contribute to Linux, we have to add the important support that the free operating system receives from companies and governments. As long as the motives that induce these organizations to back Linux persist, Linux will not go away.
Finally, and as we mentioned above, having a free operating system is central to the mission of the Free Software Foundation, Richard Stallman, and Linus Torvalds. It is thus hard to see how Microsoft can "persuade" Stallman or Torvalds to cave. And even if it did… Linux is no longer Stallman's or Torvalds' property. The project is dispersed and there is no "owner" of the code. Thus, someone else can take the lead.
Q: What's next for the both of you for future research projects?
A: There are several ways in which our work on Linux can be extended. One avenue would be to empirically estimate the difference in demand-side learning between Linux and Windows. This would allow us to make educated guesses on the chances of survival of Windows and make managerial and policy recommendations to OSS advocates, Microsoft, and administrations.
In its present form, the paper models the organization of Linux's development in a very stylized way. Having a closer look at issues of effort coordination may help us better understand how to deal with code forking, one of OSS's biggest potential problems.
A second organizational issue that could also benefit from formal analysis is that of incentives to contribute to OSS. While most research on this issue has been sociological in nature, the economic approach may shed light on why supposedly rational individuals are willing to spend valuable time and effort without extrinsic, financial incentives.
A final question that we believe is of utmost importance but that has not attracted much attention thus far (at least among academics) is: What are the drivers of adoption of OSS? Aside from its empirical relevance for both individuals and organizations, it is an interesting question from a theoretical point of view, too. The presence of network effects and demand-side learning make this a non-trivial problem. We conjecture that there are multiple equilibria and that the use of FUD to mold perceptions about future value becomes crucial.
With little academic attention focused on this question, Harvard Business School professors Pankaj Ghemawat and Ramon Casadesus-Masanell decided to dive in. Most research to date into the OSS movement has focused on the organization and management issues surrounding OSS. Ghemawat and Casadesus-Masanell chose to explore the fundamental competitive dynamics question: Will OSS ever displace traditional software from its market leadership position?
"We believe that there is still a great deal of confusion and puzzlement on how this competitive battle will develop," say the authors of the academic paper Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows, which has just been accepted for publication in a special issue of Management Science.
Ultimately, the authors believe, neither side is likely to be forced from the battlefield—Microsoft has too much market share and OSS offers too many benefits for users. But there are strategies each can use successfully against the other, as they detail in this e-mail interview.
Sean Silverthorne: Why should OSS ever displace traditional software?
Ramon Casadesus-Masanell and Pankaj Ghemawat: One main advantage of open source software is that because users can modify the code directly (as they encounter problems or have new ideas on how to improve it), the development cycle is significantly shorter. Proponents of OSS claim that if this demand-side learning (as we call it) is sufficiently strong, OSS will oust traditional software. In addition, software engineers claim that the better architecture of most OSS projects make them a potentially superior product, adding to the probability of success.
However, OSS has disadvantages too. Most importantly, it comes from behind in terms of market share (installed base). Because the value of an operating system depends critically on the number of users, traditional software has an advantage. Clearly, a larger installed base implies that there will be stronger direct and indirect network effects, and this will enhance the value of the operating system to current and potential users. In addition, a larger installed base also implies that there will be more feedback on bugs and more suggestions for new features.
Our paper introduces a dynamic mixed duopoly model in which a profit-maximizing competitor (Microsoft) interacts with a competitor that prices at zero (Linux), with the installed base affecting their relative values over time. We use a formal model to ask what conditions are needed for Linux to take over Windows. The questions that we address are: Is Linux's superior demand-side learning sufficient to win out? What is the effect of forced procurement by governments and some large corporations on the long-run equilibrium? How do cost asymmetries play out? Can Microsoft use piracy strategically to improve its market position?
From a managerial perspective, these are significant questions. If it turns out that OSS will incontestably displace traditional software, software firms need to adapt as quickly as possible to the new competitive landscape by, for example, incorporating some aspects of the open source development model, or else be ready to exit. In fact, the model suggests ways in which the likelihood of OSS winning out can be minimized (see below). If, to the contrary, OSS turns out not to be a threat to the traditional model, firms should not waste time and attention trying to figure out ways to fight this battle.
Q: Could you summarize your results?
A: First of all, let us make a caveat regarding our approach. Our methodology is formal economic modelling. What this means is that we construct a stylized mathematical model of the relationship. The model captures what we believe are the most important features of the Linux-Windows competitive battle (faster demand-side learning on the part of Linux and an initial installed base advantage for Windows), but makes important assumptions regarding other aspects. Without these simplifications, the model would not be tractable and it would not be possible to obtain results. After having analyzed the base model, we relax some of these assumptions.
Harnessing demand-side learning more efficiently is not sufficient for Linux to win the competitive battle against Windows.
Our main result is that in the absence of cost asymmetries and as long as Windows has a first-mover advantage (a larger installed base at time zero), Linux never displaces Windows of its leadership position. This result holds true regardless of the strength of Linux's demand-side learning. Furthermore, the result persists regardless of the intrinsically better design and potential differential value of Linux. In other words, harnessing demand-side learning more efficiently is not sufficient for Linux to win the competitive battle against Windows.
Having obtained this basic result, we investigate the conditions that will warrant that Linux ends up forcing Windows out. We do this by modifying the model in two ways. First of all, we look at the effect of having buyers such as governments and some large corporations committed to deployment of Linux in their organizations. We call such buyers strategic. In addition to cost-related reasons, governments back Linux because having access to the source code allows them to verify that sensitive data is treated securely. Binary code makes it hard to figure out who has access to information flowing in a network. Companies such as IBM, in contrast, back Linux because they see in OSS one way to diminish Microsoft's dominance. We find that the presence of strategic buyers together with Linux's sufficiently strong demand-side learning results in Windows being driven out of the market. This may be one main reason why Microsoft has been providing chunks of Windows' source code to governments.
Second, we look at the role of cost asymmetries. In the base model we assume that the cost structures of Windows and Linux for the development, distribution, and support of software coincide. A natural question is then whether the central result that Windows survives in the long-run equilibrium regardless of the speed of Linux's demand-side learning persists if there are cost asymmetries. We find that because OSS implies lower profits for Microsoft, the larger the cost differences are between Linux and Windows, the less able Microsoft is to guarantee the survival of Windows.
We also show that it is not all bad news to Microsoft. We analyze the effect of having forward-looking buyers and the presence of piracy, and conclude that both benefit Microsoft.
We question the effectiveness of influencing forward-looking buyers' perceptions on the value of an operating system. The model suggests that the more forward-looking buyers are, the more advantageous it is to use fear, uncertainty, and doubt (FUD) tactics to drive the competing system out. Consider SCO, a small "vulture" firm that had bought up the intellectual property rights to a particular version of Unix and threatened Linux users with lawsuits over infringement of those rights unless they agree to pay substantial licensing fees. IBM, which was one of the prime corporate sponsors of Linux as well as the target of a lawsuit by SCO that sought $1 billion in damages, alleged in mid-2003 that SCO was in cahoots with Microsoft. Our model indicates that if buyers are sufficiently forward-looking, such actions may jeopardize the ability of Linux to continue as an effective competitor in the operating system space.
We also look at the effect of piracy and ask whether piracy can ever be beneficial to Microsoft. This extension was motivated by analyzing data on a cross-section of countries on Linux penetration and piracy rates. We found that in countries where piracy is highest, Linux has the lowest penetration rate. The model shows that Microsoft can use piracy as an effective tool to price discriminate, and that piracy may even result in higher profits to Microsoft!
Finally, the paper investigates the societal welfare consequences of OSS availability by comparing different industry structures (monopoly and duopoly). We find that while a monopoly of Linux is always preferable (from the point of view of societal welfare) to a Windows monopoly, it is ambiguous whether a duopoly Linux-Windows is better than a Windows monopoly.
The basic trade-off is the following: With a duopoly, more individuals and organizations use PCs because prices are lower, and this raises welfare. However, with a duopoly, no operating system ends up exploiting fully its potential because developers' efforts wind up divided between the two systems. However, with a monopoly, the efforts to develop new software and improve the platform are directed towards one system only and this may turn out to be better from a social welfare perspective.
Q: In general, what surprised you about the results? What assumptions did you have going in that didn't hold up?
A: When we began the project, we thought that network effects and demand-side learning would result in Linux forcing Windows out. After all, we reasoned, if Windows is sold at a positive price and Linux is free, there will always be Linux users, and if the strength of Linux's network effect is large, the value of Linux to prospective users should eventually become larger than that of Windows.
Well… we were wrong (and this illustrates the usefulness of developing a formal model). What we had missed is that Microsoft's initial advantage (larger installed base) together with its pricing power allow the company to price strategically to control Linux's market share going forward. By lowering the price of Windows, the demand for Linux shrinks to the point where Linux is not a threat to the survival of Windows. The model also shows that a "milking strategy" (setting high prices in the short term and leaving the market at some point in the future) is not desirable to Microsoft. The reason is that if Microsoft follows such a strategy, as the last period becomes closer and closer, the relative benefit of abandoning it and lowering prices to survive a few more periods increases dramatically.
The model shows that Microsoft can use piracy as an effective tool to price discriminate, and that piracy may even result in higher profits to Microsoft!
The "Windows persistence" result turns out to be robust to different specifications of the model. In fact, in the first few months into the project we had developed several alternative models and every one of them yielded this very same finding.
In addition to this main result, we were also surprised to find that piracy may end up increasing Microsoft's profits. To understand why, notice that there are two types of pirates: those who would not have bought Windows in the first place because it is too expensive, and those who would have bought Windows but now decide to pirate it. The first category increases Windows' installed base without affecting sales. As a consequence, this group increases the value of Windows. And thanks to these pirates, Microsoft is able to set higher prices in the future (because the value of the system goes up). In addition, having these pirates means that Linux's installed base does not grow as much as it would have if piracy weren't there. The second type of pirates (those who in the absence of piracy would have bought Windows) reduces Windows' sales and profit. Thus, if the proportion of first-type pirates is sufficiently large, Microsoft's profits will increase with piracy.
Finally, the social welfare result that a Windows monopoly is not always worse than a Linux-Windows monopoly was also unexpected. This questions the social desirability of policies aimed at guaranteeing Linux's survival.
Q: You mention in the paper that the model is not to be taken as a literal model of the Linux/Microsoft competition. But can you say anything about why Linux has enjoyed success against Microsoft?
A: Linux's success against Microsoft is still relative. In the client space, Windows is the undisputable leader, and in the server space, Linux and Windows have both been gaining positions for the past ten years. The big losers are Novell, Unix, Solaris… everybody except Linux and Windows.
Despite this, Microsoft is visibly concerned about Linux's upsurge. The Halloween memos (see http://www.opensource.org/halloween/) are an obvious testimony of this concern: "OSS poses a direct, short-term revenue and platform threat to Microsoft, particularly in server space. Additionally, the intrinsic parallelism and free idea exchange in OSS has benefits that are not replicable with our current licensing model and therefore present a long-term developer mindshare threat."
Microsoft has a great deal to lose if Linux wins the operating systems battle. Microsoft is a software company, and a defeat in operating systems would point to the vulnerability of its entire business portfolio. In addition, the operating systems group is one of Microsoft's biggest revenue generators. Moreover, to a large extent Microsoft's sustained success over time in such a dreadfully rugged landscape has been due to its dominant position in operating systems. It is well known that Microsoft won the browser wars leveraging its dominant position in client operating systems. And the same will happen in the media player space unless the American or European antitrust authorities prevent it. We expect Microsoft to put all its ammunition to fight this battle.
Part of the reason why Linux has made significant inroads is the determination of Richard Stallman and the Free Software Foundation to have a free (as in freedom) operating system. According to Stallman, application software will never be truly free unless there is a free operating system that supports it. Thus, since the moment Linus Torvalds and Richard Stallman joined forces, a big chunk of the foundation's efforts have been directed at building a free operating system.
Then there are some large corporations and governments backing the development of Linux. These players use Linux as a way to curb Microsoft's dominance. This support is important because there are tedious portions of the code that would rarely be developed spontaneously by members of the Linux-developer community.
Q: From your modelling, what can Microsoft do strategically to remain competitive against a product that is argued to be of better quality, is updated more frequently, and is free?
A: A few actions that the model suggests Microsoft could do to remain competitive are:
Increase its own demand-side learning.
Listen to the demands of the user community to better exploit the benefits of demand-side learning. Microsoft must facilitate communication between the user base and the company to have prompt feedback on the performance of its products.
Make an effort to incorporate improvements in the code (fix bugs and introduce new features) as soon as possible.
Reward those who propose improvements for the code. At the very least, Microsoft could publicly acknowledge those who proposed new features or discovered bugs.
Feed its direct and indirect network effects.
Support as much as possible the independent software vendor community so that the quantity and quality of complements is substantially above that of Linux.
Encourage competition between the different ISVs. The lower the prices of applications, the more appealing the Microsoft system will be.
Price discriminate. Give Windows and applications away to schools and universities so that users build their file libraries on Microsoft, not Linux.
Minimize the number of strategic buyers.
Let governments access the source code and give guarantees that sensitive data is treated confidentially.
Price discriminate. Give binary away to organizations and individuals who are not willing to spend money on Windows but who would be willing to use Linux because it is free.
Reduce costs to be able to sustain long periods of time with low prices.
Decrease Linux's demand-side learning.
Because the way to do this involves some questionable (from a legal point of view) actions, we will refrain from suggesting specifics.
Lessen Linux's direct and indirect network effects.
Make it as hard as possible for Windows applications to work on Linux.
Same for MS Office documents.
"Promote" Linux's code forking.
Infuse fear, uncertainty, and doubt into the Linux user community. For this to work, the statements must be perceived as credible. Credibility requires some past FUD announcements to be realized.
Q: Is there a scenario where Linux could be kicked out of the market by Microsoft?
A: Strictly speaking, within our model the only way in which Microsoft can get rid of Linux is by setting the price at zero. But, even if Microsoft did that, the company would still be selling MS Office for a positive price. Thus, we conjecture that even in this case, there would be people developing and using Linux.
The more important question is: What motivates developers to contribute to open source projects in the first place? As long as the drivers are there, Linux will persist. Given that Linux was born in 1992 in an industry already dominated by Microsoft, and given that the financial motive is secondary, it will be very hard for anyone to oust Linux.
The organizational stream of research on OSS has identified several drivers of motivation to contribute to open source projects. For Microsoft to have a chance to kick Linux out of the market, it needs to successfully fight them.
First, some developers see software as scientific knowledge to be shared "like the sharing of recipes among cooks." In fact, some describe software developers more like artists seeking fun, challenge, and beauty in their work than like calculative, square-minded engineers. Second, some individuals find it fun to go against Microsoft. As the OSS/free software movement gains momentum and developers foresee that victory is within reach, they increase their effort to accomplish this. Third, because most OSS projects have a log file listing all contributors to the code, some developers find it desirable to participate in OSS projects to signal their ability and to enhance their chances of promotion and professional advancement. Finally, user-developers sometimes fix bugs that they find and then release the improved code so that everybody can benefit.
It will be very hard for anyone to oust Linux.
To the motivations of independent developers to contribute to Linux, we have to add the important support that the free operating system receives from companies and governments. As long as the motives that induce these organizations to back Linux persist, Linux will not go away.
Finally, and as we mentioned above, having a free operating system is central to the mission of the Free Software Foundation, Richard Stallman, and Linus Torvalds. It is thus hard to see how Microsoft can "persuade" Stallman or Torvalds to cave. And even if it did… Linux is no longer Stallman's or Torvalds' property. The project is dispersed and there is no "owner" of the code. Thus, someone else can take the lead.
Q: What's next for the both of you for future research projects?
A: There are several ways in which our work on Linux can be extended. One avenue would be to empirically estimate the difference in demand-side learning between Linux and Windows. This would allow us to make educated guesses on the chances of survival of Windows and make managerial and policy recommendations to OSS advocates, Microsoft, and administrations.
In its present form, the paper models the organization of Linux's development in a very stylized way. Having a closer look at issues of effort coordination may help us better understand how to deal with code forking, one of OSS's biggest potential problems.
A second organizational issue that could also benefit from formal analysis is that of incentives to contribute to OSS. While most research on this issue has been sociological in nature, the economic approach may shed light on why supposedly rational individuals are willing to spend valuable time and effort without extrinsic, financial incentives.
A final question that we believe is of utmost importance but that has not attracted much attention thus far (at least among academics) is: What are the drivers of adoption of OSS? Aside from its empirical relevance for both individuals and organizations, it is an interesting question from a theoretical point of view, too. The presence of network effects and demand-side learning make this a non-trivial problem. We conjecture that there are multiple equilibria and that the use of FUD to mold perceptions about future value becomes crucial.
Monday, March 12, 2007
Microsoft and Open Source
Microsoft and Open Source Software
Microsoft has been learning from the OSS community regarding the benefits of deeper collaboration and increased transparency leading to better communication with customers. We believe the most effective pathway for a commercial software company is to strike a balance between investing in research and development and the release of intellectual property assets in the form of source code for both reference and collaborative purposes.
The increased competition resulting from the proliferation of OSS has been constructive for the industry as a whole. The implications of OSS within multiple market segments are causing organizations to figure out what is most important to them. It has placed a higher premium on innovation and a drive to deliver greater value for lower costs. The big winner in this equation has been the software consumer, whose choices have increased dramatically.
The Shared Source Initiative is the manifestation of these factors within Microsoft. With more than 80 source code offerings being used by more than two million developers, Microsoft is looking to apply the best of open source while helping its customers avoid many of the model’s pitfalls. There is no one, correct way to create software. The ecosystem as a whole will benefit from a rich tapestry of development, business, and licensing models.
Read It Microsoft Web Site :)
Microsoft has been learning from the OSS community regarding the benefits of deeper collaboration and increased transparency leading to better communication with customers. We believe the most effective pathway for a commercial software company is to strike a balance between investing in research and development and the release of intellectual property assets in the form of source code for both reference and collaborative purposes.
The increased competition resulting from the proliferation of OSS has been constructive for the industry as a whole. The implications of OSS within multiple market segments are causing organizations to figure out what is most important to them. It has placed a higher premium on innovation and a drive to deliver greater value for lower costs. The big winner in this equation has been the software consumer, whose choices have increased dramatically.
The Shared Source Initiative is the manifestation of these factors within Microsoft. With more than 80 source code offerings being used by more than two million developers, Microsoft is looking to apply the best of open source while helping its customers avoid many of the model’s pitfalls. There is no one, correct way to create software. The ecosystem as a whole will benefit from a rich tapestry of development, business, and licensing models.
Read It Microsoft Web Site :)
Saturday, February 10, 2007
Kerala's draft IT policy released
THIRUVANANTHAPURAM: The draft information technology (IT) policy released by Chief Minister V.S. Achuthanandan here on Wednesday proposes to make Kerala a cradle of knowledge workers. It aims to upgrade the productivity, skill and knowledge levels of the citizen.
Proposals include establishment of an International Centre for Free Software and Computing for Development, ITES Training Centre (in Kochi) and extension of Internet to all educational institutions and villages by 2010. Around 3,000 broadband-enabled information hubs called Akshaya e-Centres will be set up in difference parts of the State.
The Government will support private initiatives to set up IT parks. Private IT parks that meet a minimum set of standards shall be promoted by the Government as an integral part of the State's IT infrastructure, if the parks desire so. The Government will expand Technopark in Thiruvananthapuram and Infopark in Kochi on its own accord and in partnership with private infrastructure providers. Focus areas include e-governance, free software and development of appropriate technologies. The State will network with national and international organisations and industry for research and development in Information and Communication Technologies (ICT) and knowledge sharing. The proposed Centre for Free Software will focus on developing technologies relevant for social and economic advancement in developing countries.
The policy stresses that Free and Open Source Software (FOSS) will be used in e-governance projects. Open standards such as Unicode and Open Document Format and Open Architectures will be followed in e-governance projects to avoid total dependence on select vendors. The Government proposed to develop the State as the FOSS destination in the country. It will provide special incentives to companies developing FOSS. The policy says that the State will try to make maximum use of ICT in governance. Taking the Right to Information Act in its true spirit, the Government will take up ICT-enabled programmes for efficient flow of information between citizens and the Government.
The Government will make use of all the media tools and emerging technologies to ensure proper communication between the Government and the citizen. The Government will promote the use of Web sites, e-mails and other news communication facilities in various Government and semi-Government organisations.
Proposals include establishment of an International Centre for Free Software and Computing for Development, ITES Training Centre (in Kochi) and extension of Internet to all educational institutions and villages by 2010. Around 3,000 broadband-enabled information hubs called Akshaya e-Centres will be set up in difference parts of the State.
The Government will support private initiatives to set up IT parks. Private IT parks that meet a minimum set of standards shall be promoted by the Government as an integral part of the State's IT infrastructure, if the parks desire so. The Government will expand Technopark in Thiruvananthapuram and Infopark in Kochi on its own accord and in partnership with private infrastructure providers. Focus areas include e-governance, free software and development of appropriate technologies. The State will network with national and international organisations and industry for research and development in Information and Communication Technologies (ICT) and knowledge sharing. The proposed Centre for Free Software will focus on developing technologies relevant for social and economic advancement in developing countries.
The policy stresses that Free and Open Source Software (FOSS) will be used in e-governance projects. Open standards such as Unicode and Open Document Format and Open Architectures will be followed in e-governance projects to avoid total dependence on select vendors. The Government proposed to develop the State as the FOSS destination in the country. It will provide special incentives to companies developing FOSS. The policy says that the State will try to make maximum use of ICT in governance. Taking the Right to Information Act in its true spirit, the Government will take up ICT-enabled programmes for efficient flow of information between citizens and the Government.
The Government will make use of all the media tools and emerging technologies to ensure proper communication between the Government and the citizen. The Government will promote the use of Web sites, e-mails and other news communication facilities in various Government and semi-Government organisations.
Wednesday, January 24, 2007
Tamil Nadu (India) may shut door on Microsoft
Chennai, Dec. 31: The Tamil Nadu government, which is on a fast-track pushing the state to the top in the Indian IT sector, has almost shut its door on the software giant, Microsoft, preferring the Open Source Systems (OSS) for reasons of costs and easy migrating capabilities.
“Initially, 99 per cent of government systems have been running on Microsoft systems but then 2007 will be a watershed year for the state IT sector. We are fast migrating to Linux operating systems which are so much cheaper and can be operated at low cost, besides offering continuous updates and freedom from viruses,” says Mr C. Umashankar, managing director of state-owned ELCOT, vested with the responsibility of overseeing such ambitious government projects as e-governance, enumerating the beneficiaries of the free TV scheme, family ration cards and the free sari-dhoti distribution.
“We have already dispatched 6,500 Linux systems to village panchayats and another 6,100 Acer desktop systems with Suse Linux operating systems are on their way. We are procuring 20,000 desktop systems for schools, which will run only on Suse Linux. Remaining 30 desktop systems will also migrate as and when the new machines arrive,” Mr Umashankar told this newspaper.
He said all the ELCOT servers were on Redhat Linus and the government IT company’s 28-seater software development wing was fully on Suse Linux.
“We will train over 30,000 government officials in Linux Operating Systems and Open Office. A contract has been already finalised with the government departments and we have set up a Linux support centre with two Linux-certified professionals to assist the state officers. This number will go up to ten or more in 2007, which will be a path-breaking year for government on migration to Linux Operating System,” Mr Umashankar said. “India can live without Microsoft packages and even progress but Microsoft will find it tough without a huge country like India buying their software packages,” he said.
He said a top official from Microsoft India had met him twice to convince him to continue with MS products. The official offered the XP operating system for about Rs.7000 while he quoted Rs.500. “I explained to her that for a mere Rs.300, I could get the entire operating system, office productivity software and a wide range of utility tools, such as DVD/CD writing software, database software, multimedia editing software, vector map-drawing software plus a whole range of software development tools. Also, I have the option of downloading this entire package in DVD media and not even pay that Rs.300, which is the media cost and not the software charges,” said the ELCOT chief, an IT expert himself besides being a senior IAS bureaucrat.
He said he had also pointed out to the Microsoft official that MS Office did not allow saving of documents in open document format. While it was possible to open all MS Office files using Openoffice.org, the vice versa cannot be done. “I asked her why ELCOT should buy such an inferior product when
Openoffice.org is available free of cost for Windows as well as Linux.
She said Microsoft are working on open XML format,” he added. Mr Umashankar said he had written to state finance secretary enumerating the “huge financial and working advantages” of shifting to Open Source Environment in all government departments. “I have been receiving great support from all the senior IAS officers here, from the chief secretary downwards. It is very encouraging.
ELCOT is not the loser when Microsoft did not accept our price of Rs.500; on the other hand, Microsoft loses out due to our big volumes involved,” he said.
“There is a gross misconception among the governments and officials that if they migrate to Open Source platform, Microsoft would get angry and the entire software industry could come to a grinding halt. This is totally misplaced fear,” Mr Umashankar said.
“Within the next five years, it is going to be the IT services which would dominate the revenue share of the IT companies, because more and more users, governments and the corporate sector have started migrating to OS software, thus removing the scope for more revenues from products. It is time that the users understood this scenario and start saving their precious revenues,” Mr Umashankar said.
Talking of the changes happening in this direction, he said he had ordered 43 rack servers for ELCOT to host various government applications. “All the applications are to run under OS software. I would have paid Rs.20 lakh per server if I had adopted proprietary software but now I have saved over Rs.8 crore from this one transaction.
We intend to procure 1000 servers in the next two years. Imagine the amount of savings we are getting out of this,” the ELCOT chief said. “In my view, a state government of TN magnitude would be able to save Rs 200-500 crores every year, when the National e-governance action plan gets implemented,” he said, adding that school children too could get the benefit of “more robust, secure and economical Open Source software for their work,” he added. “Today, there is more demand for OSS trained engineers. I require at least 500 trainers to train 30,000 state officials across Tamil Nadu in the next six months.
“Initially, 99 per cent of government systems have been running on Microsoft systems but then 2007 will be a watershed year for the state IT sector. We are fast migrating to Linux operating systems which are so much cheaper and can be operated at low cost, besides offering continuous updates and freedom from viruses,” says Mr C. Umashankar, managing director of state-owned ELCOT, vested with the responsibility of overseeing such ambitious government projects as e-governance, enumerating the beneficiaries of the free TV scheme, family ration cards and the free sari-dhoti distribution.
“We have already dispatched 6,500 Linux systems to village panchayats and another 6,100 Acer desktop systems with Suse Linux operating systems are on their way. We are procuring 20,000 desktop systems for schools, which will run only on Suse Linux. Remaining 30 desktop systems will also migrate as and when the new machines arrive,” Mr Umashankar told this newspaper.
He said all the ELCOT servers were on Redhat Linus and the government IT company’s 28-seater software development wing was fully on Suse Linux.
“We will train over 30,000 government officials in Linux Operating Systems and Open Office. A contract has been already finalised with the government departments and we have set up a Linux support centre with two Linux-certified professionals to assist the state officers. This number will go up to ten or more in 2007, which will be a path-breaking year for government on migration to Linux Operating System,” Mr Umashankar said. “India can live without Microsoft packages and even progress but Microsoft will find it tough without a huge country like India buying their software packages,” he said.
He said a top official from Microsoft India had met him twice to convince him to continue with MS products. The official offered the XP operating system for about Rs.7000 while he quoted Rs.500. “I explained to her that for a mere Rs.300, I could get the entire operating system, office productivity software and a wide range of utility tools, such as DVD/CD writing software, database software, multimedia editing software, vector map-drawing software plus a whole range of software development tools. Also, I have the option of downloading this entire package in DVD media and not even pay that Rs.300, which is the media cost and not the software charges,” said the ELCOT chief, an IT expert himself besides being a senior IAS bureaucrat.
He said he had also pointed out to the Microsoft official that MS Office did not allow saving of documents in open document format. While it was possible to open all MS Office files using Openoffice.org, the vice versa cannot be done. “I asked her why ELCOT should buy such an inferior product when
Openoffice.org is available free of cost for Windows as well as Linux.
She said Microsoft are working on open XML format,” he added. Mr Umashankar said he had written to state finance secretary enumerating the “huge financial and working advantages” of shifting to Open Source Environment in all government departments. “I have been receiving great support from all the senior IAS officers here, from the chief secretary downwards. It is very encouraging.
ELCOT is not the loser when Microsoft did not accept our price of Rs.500; on the other hand, Microsoft loses out due to our big volumes involved,” he said.
“There is a gross misconception among the governments and officials that if they migrate to Open Source platform, Microsoft would get angry and the entire software industry could come to a grinding halt. This is totally misplaced fear,” Mr Umashankar said.
“Within the next five years, it is going to be the IT services which would dominate the revenue share of the IT companies, because more and more users, governments and the corporate sector have started migrating to OS software, thus removing the scope for more revenues from products. It is time that the users understood this scenario and start saving their precious revenues,” Mr Umashankar said.
Talking of the changes happening in this direction, he said he had ordered 43 rack servers for ELCOT to host various government applications. “All the applications are to run under OS software. I would have paid Rs.20 lakh per server if I had adopted proprietary software but now I have saved over Rs.8 crore from this one transaction.
We intend to procure 1000 servers in the next two years. Imagine the amount of savings we are getting out of this,” the ELCOT chief said. “In my view, a state government of TN magnitude would be able to save Rs 200-500 crores every year, when the National e-governance action plan gets implemented,” he said, adding that school children too could get the benefit of “more robust, secure and economical Open Source software for their work,” he added. “Today, there is more demand for OSS trained engineers. I require at least 500 trainers to train 30,000 state officials across Tamil Nadu in the next six months.
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