Thursday, February 28, 2002
Eric Raymond recently stated that Microsoft's ability to charge for the OS will erode as the price of the PC continues to drop. I agree. So why, then, are we spending millions suing Microsoft? What had the market failed to do which required a government-inspired remedy?
Keep in mind that PC prices have been dropping for years. Also keep in mind that this was largely due to the unified market which existed for Windows-oriented products. Hardware and software vendors could target the unified Windows market, creating competition which would not have existed in a fragmented market (not to mention generating economics of scale). As it turns out, the natural end point of that process may well be a market where it is harder to make money from OS sales.
I predict that Microsoft is banking on becoming a software / web services company, with the OS merely becoming a platform under their control upon which to build those most of those services. At that point, I also predict that Microsoft will open source Windows. They can only do that, however, once they are less dependent on OS revenues, something they are working to accomplish through their .NET initiative (which can allow client software to work across platform). Microsoft's appeal will be the unification they bring to a diverse range of PC and non-PC hardware and software options. .NET is merely the first step in that process, a process which will end with Microsoft less reliant on OS revenue and more able to give it away (or almost give it away. They'll charge so long as consumers are willing to pay extra to buy Microsoft features).
As a side point, Eric Raymond is NOT in favor of antitrust policy, as he reveals here. Of course, he isn't exactly a Microsoft chearleader, either, but no one's perfect.
Keep in mind that PC prices have been dropping for years. Also keep in mind that this was largely due to the unified market which existed for Windows-oriented products. Hardware and software vendors could target the unified Windows market, creating competition which would not have existed in a fragmented market (not to mention generating economics of scale). As it turns out, the natural end point of that process may well be a market where it is harder to make money from OS sales.
I predict that Microsoft is banking on becoming a software / web services company, with the OS merely becoming a platform under their control upon which to build those most of those services. At that point, I also predict that Microsoft will open source Windows. They can only do that, however, once they are less dependent on OS revenues, something they are working to accomplish through their .NET initiative (which can allow client software to work across platform). Microsoft's appeal will be the unification they bring to a diverse range of PC and non-PC hardware and software options. .NET is merely the first step in that process, a process which will end with Microsoft less reliant on OS revenue and more able to give it away (or almost give it away. They'll charge so long as consumers are willing to pay extra to buy Microsoft features).
As a side point, Eric Raymond is NOT in favor of antitrust policy, as he reveals here. Of course, he isn't exactly a Microsoft chearleader, either, but no one's perfect.
