Linux vs Microsoft in Countries

IDG writes about the status in various countries on the Linux-Microsoft battle: “Government officials the world over are getting drawn into the debate over the relative merits of using open source software rather than Microsoft Corp.’s Windows applications and other software developed by vendors who closely guard the intellectual property of their source code. Some countries, such as Germany, have decided to replace Windows and other commercial software products with open source applications. Other countries remain committed to commercial software, and yet others are straddling the fence.”

There is really no excuse for low-income countries to use Microsoft software. This is the opportunity has — on desktops and servers for the next set of users.

Also see: Slashdot discussion

Business Week on Microsoft

Microsoft stories are always interesting to read. It is after all the world’s largest company (by market cap). The latest is a cover story in Business Week — Ballmer’s Microsoft. An excerpt:

[Microsoft’s] new mission sounds simple enough, but it’s audacious in scope: “To enable people and businesses throughout the world to realize their full potential.” That’s far broader than the company’s basic goal of building software for any device, anywhere. For the first time, Microsoft’s mission is not just about technology. It’s also about improving the way the company handles relationships with customers and others in the technology industry.

Market Break in Office Suite

There is an excellent analysis of the action in the Office Suites segment by Amy Wohl (the newsletter issue isn’t up yet, but should be soon; I got mine via email). Amy’s perspective is of course the developing countries like the US. It becomes even more pronounced when we consider low-income countries.

Writes Amy: “A market break occurs (you can usually only see them after the fact, not before or during) when some event changes what mainstream customers will choose to buy. For example, The announcement by IBM of its Personal Computer in 1981 was such a break. Before, users generally did with little or no individual access to computing (which was largely terminal based). After, computing started on the road to becoming highly personal. By the early 90’s, more than 80% of U.S. office workers sat in front of a PC, changing office work and office workers forever (and making Microsoft one of the most important companies in the world in the process).”

Amy summarises the reasons why Microsoft may face a “market break”:
– Microsoft’s decision to shift to Annual Revenues and corporates not keen on upgrades and the annual fees
– Economy has impacted IT budgets and spending has slowed
– Govt and some corporates are playing the Linux / Open Source Card

Just such a market break may impact Microsoft in the Office Suite segment, with competition coming from OpenOffice (free) and Sun’s Star Office (USD 75 or less).

One point Amy makes is that “the real cost of equipping office workers with
computing function is not software (or hardware), but rather human costs, especially support.” In emerging markets like India, it is the other way around. The hardware and software costs are prohibitive, and support costs are much lower.

Not only does OpenOffice make excellent sense in these markets, it is also important to bring down the total cost of computer ownership. This is where there is a great opportunity to rethink the enterprise IT infrastructure for the next 500 million people. The innovative ideas aren’t going to come easily from the US companies, since they are selling in a market where there already is a computer equipped with all the software needed on all the desktops.

For example, think of a Thin Client, Linux desktop which is (a) low-cost: no more than USD 15 per person per month for hardware, software and support (b) works out-of-the-box, with everything pre-installed and running off the (thick) server (c) is completely compatible with the Windows world, so one can send/receive mails/files to Windows users, share files with them on the LAN, and even migrate from Windows (d) trivially easy to manage for the administrator “over the wire”, because the client has nothing really to worry to about (if the hardware goes bad, junk it and just use another Thin Client — since all the data and preferences is server, the user sees no difference and little down-time) (e) has a limited but complete (for most users) set of applications, including a graphical desktop, Mail, Browser, Office applications, Calendaring and Instant Messenger, and (f) needs little training for even novice users.

This is today in the realms of possibility. It has been in recent times. What is needed is to put it all together in a bundle. Users dont need to be setting up anything, they just need to use it. This is what can disrupt the IT value chain in the coming years.

Eisner on Leaders

Came across a nice thought on Leadership by Michael Eisner (Disney) in the Jan-Feb 2000 issue of Harvard Business Review: “A leader has four roles. You’ve got to be an example. You’ve got to be there. You’ve got to a nudge, which is another word for motivator, really. And you’ve got show creative leadership — you have to be an idea generator, all the time, day and night.”

Microsoft SME Strategy

An excellent story in Information Week analysing Microsoft’s moves following its recent purchase of Navision (coming after the previous buy of Great Plains):

Microsoft wants to sell small and midsize companies low-cost, ready-to-assemble enterprise resource planning, supply-chain, financial, and other run-the-business applications. The blueprint calls for Web services to weave them all together.

As Gates envisions the world, desktop and business applications will be woven together via Web services to let IT departments mix and match applications across networks, with less middleware, custom integration, and consulting work. Microsoft officials give the example of an Excel spreadsheet user accessing inventory data from a supplier’s remote server. This desktop-to-back office architecture, seamlessly linking people and systems within and across companies, will provide an IT backbone for collaborative business, Gates says. The linchpin will be XML, the development language and Web-services standard, incorporated in development tools, databases, and the apps themselves.

We’ve been thinking along these lines also: enterprise software Legos which can be put together on the server. The difference: in our view, the SMEs use Thin Clients, Linux on the Thick Server, and pay USD 5 per person per month. Its for the SMEs in the world’s low-income countries, who cannot afford the high cost of computers and the increasingly higher cost of software.

Microsoft and Web Services

News.com on Microsoft’s .Net My Services — This is an interesting article. It talks about the prevailing internal confusion about the future path for Microsoft’s web services initiatives. Two points are especially worth thinking about:


    [A] Microsoft plan under development two years ago to launch Web-based business productivity tools, code-named Netdocs, was “blown up,” or discontinued, because Microsoft executives didn’t think the technology plan was viable.

    Netdocs was expected to be an integrated business application including e-mail, personal information management, document-authoring tools, digital media management and instant messaging. Microsoft planned to make Netdocs available only as a hosted service over the Internet, not as software that could be purchased separately or pre-loaded onto a machine.

    The plan competed squarely with Microsoft’s Office business software, which makes up more than a third of the software giant’s overall revenue.

The idea seems right to me, but it is targeted at the wrong users. It should be focused on the new users — they are less savvy than the ones who have been using computers. They need a simpler, more integrated working environment. The way NetDocs should have worked is to have it run off a LAN server, not the Internet.

But then that’s the domain of MS Office (on the desktop). This is the Innovator’s Dilemma. There is a great profit machine which Microsoft is not willing to disrupt.

The second point:


    Microsoft plans to introduce software that big companies can use to set up instant messaging and internal communications over internal networks instead of the Internet. “An example would be that within Microsoft, if I wanted to talk with someone through a video, say, on the PC, or in an instant message conversation, I wouldn’t have to go to the Internet,” [Allchin] said.

The thinking here is along the right track. But it will work best in the context of emerging markets where bandwidth is a huge problem still. These markets are state-of-the-art when it comes to LANs, but many years behind when it comes to WANs. So, it makes sense to (a) think of running apps on the LAN (b) provide information replicated across locations in nearreal-time, rather than real-time.

Microsofts purchase of Navision

Its an interesting move. Gives them a presence in the SME market in Europe, coming after their purchase of Great Plains for the US SME market in late 2000. Wonder who theyll look at in Asia.

According to a Merrill Lynch report, Navision sells ERP and CRM software to small and medium sized businesses, predominantly in EMEA (85% of total revenue). Navision has been Microsoft-centric for some time and runs its apps on SQL Server. [EMEA = Europe, Middle East and Africa]

The definition of small and medium businesses varies greatly across the world. Asia has lots of exporters, especially in China and South-East Asia. Given the price points for the software (which will obviously be denominated in USD), the bottom of the enterprise pyramid will still remain untapped.

Also see: News.com story on the purchase, and Gartners take.