The Open Source Software Challenge
The next course I signed up for is one that helps me prepare for my future role in the Consumer Online International business group in Microsoft. (the COI, as we call it). This course is an approach to Open Source Software. OSS evolves faster and is more adaptive to local markets than other technologies. Given its community-based foundation, OSS can be a threat, an opportunity, or a combination of both to each of our businesses. This course will describe the OSS landscape, how to articulate Microsoft’s position, and how to successfully compete against Linux/OSS. This course is offline enabled. I’m eagerly awaiting the insights this will bring me, or the arguements and thoughts that can help me provide a solid base of reasoning to get through the often animated discussion I have with the adepts of Open Source.
Linux is a growing competitive threat and at the same time open source software (OSS) is an opportunity for Microsoft. This 30-minute course describes the state of the competitive environment,our strategy, and how you can engage in conversation to both compete with Linux and foster the open source opportunity for Microsoft. The course includes scenarios that illustrate these core messages through sample conversations.
The course starts with a short Q&A investigation amongst MSFT employees at the campus in Redmond to test their knowledge, before they took this course. As expected, the results are really funny, but for obvious reasons I can’t post the video. Internal only.
Then we’re served with a quote from our CEO, Steve Ballmer: Open Source is the one competitor we’ll always have, and it’s the best competitor we’ll have. What do you do when your opponent has no cost structure for development or distribution?
In a video introduction Sam Ramji, Senior Director of Platform Strategy and head of World Wide CSI, explains what Open Source is and how he is helping Microsoft overcome the challenges to the business presented by Linux and Open Office and embracing the opportunities that are presented by open source software.
He says our strategy to compete is to differentiate versus Linux and Open Office and to interoperate and support other open source software packages running on Microsoft platforms. Together, this provides a powerful engine for growth that we’ve seen working to Microsoft’s advantage for the last few years and he expects it to continue in the future.
Check out this informational overview that maps Microsoft’s technologies and services against some of the more common open source initiatives in the marketplace:
Unlike the open source model. Microsoft uses a commercial software model, which involves hiring developers and charging an upfront commercial license fee for the value of the software.
In response to the growing share of Linux, Microsoft established the Commercial Software Initiative (CSI), whose purpose is to engage indialog with commercial customers, governments, academia, partners and developers about the value of the Commercial Software Model and the Windows integrated software platform.
The overall goal of this engagement is (quote Steve Ballmer) “to best Linux in every quarter, in every region and in every workload.”
To best Linux, we need to determine where it is right now. The graph below projects market share through 2012. We can see the Linux share is growing, mostly by taking from Unix, NetWare and others. This graph pictures the x86 Market Shipment Share.
So why is it so important for Microsoft to assure that Linux does not take market share away from Windows Server? Our business is based on selling our platform software licenses and attaching application software for revenue growth. Each sale of platform software is called a ’socket’, it’s the first Microsoft product a customer purchases in the stack of products.
The image below shows how the platform software is viewed in terms of 4 sockets:
So in order for Microsoft’s business to sustain growth, it’s important to protect the sockets. Every time you miss out on an opportunity to sell and implement one of these sockets, you lose the opportunity to follow-up with sales of other high-volume products like SharePoint, Exchange or SQL Server.
In our strategy to directly compete with Linux’s solutions in these segments of the market, we have two interacting elements to fall back on:
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First of all, we compete for share by differentiating in the areas of Total Cost Ownership, Reliability, Security and Available Choice.
Second, we also compete for share by interoperating with open source technologies in heterogeneous customer environments. We do this by growing the software ecosystem (including open source software) on the Microsoft platform and working with competitive open source platforms to sell our own platform software.
The specific messages for our customers regarding our solutions are that Windows is a platform that runs all types of software, including open source software. Windows is designed for interoperability and can work with open source platform software such as Linux.
Windows has a very strong value proposition because of the total cost of ownership (TCO), reliability and security verus Linux and provides the best ecosystem for partners, as if fosters better business opportunities and revenue.
Microsoft has worked and will continue to work with open source communities to grow the software ecosystem.
Did you know that Microsoft is focused on helping customers and partners succeed in a world of mixed technology environments and that we participate in the world of choice, which includes open source approaches and applications. The competition open source developers offer us inspires and challenges us to deliver great products and value. It dares us to up the ante. Time after time.
Windows remains a great platform to adopt, even is you are running open source applications. That’s why Microsoft is reaching out to the top open source vendors to make sure their applications run well in a Windows environment. Windows integrates and interoperates with competing platform software, including Linux.
The interoperability principles Microsoft has define how we build software and partner in the marketplace to ensure our customers have the best possible experience in a heterogeneous environment, even if a part of the environment runs on Linux.
But still, we believe that Windows provides the best ecosystem for partners, as it drives better business opportunities and more revenue. The significant differences between Microsoft Aligned Partners and the Non-Microsoft Partners in plenty of investigated and mapped business situations is that the company performance knew twice the growth and twice the cash flow from operations, that the business vellocity included almost twice the customer growth and over the tenfold of deal growth. The deal execution itself consisted of much shorter sales cycles and reduced implementation time. To top it off, overall productivity amongst employees grew 70%.
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The course ended with another Q&A compilation with contributions of employees who attended the course I just followed. As expected, their knowledge about Microsoft’s position vs open source and the competitors in the field has grown, and the answers they give are all correct. I’m not really sure I can tackle all the questions or issues I encounter when talking to open source addicts, but for sure, I know much more about the technology, the segments we compete against it and the opportunities we create by implementing it and supporting it on our platforms in order to leverage our own products. And I think that’s exactly the purpose of the course.
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