Open Source at Microsoft: an analysis of Microsoft Open Source Strategy

I have been invited to the Open Source in Mobile Conference to give a speech about “Microsoft Open Source Strategy”, and the implications of the strategy for developers and ISVs.

Recently Microsoft made clear its open source intent to go beyond finding ways to thwart Linux and other non-proprietary applications, maybe leaving behind over 10 years of bittersweet memories. As a matter of fact speaking of a “Microsoft Open Source Strategy” could sound an oxymoron, maybe even more of Commercial Open Source. Microsoft attitude towards open source ranged from scaring open source customers talking of (unveiled) software patents to developing and distributing the Microsoft installer on SourceForge, stepping on Samba ‘s shoes and eventually establishing an agreement with them, going even beyond obligations imposed by the EC.

A Change of Perception

A Change of Perception by jpaul

A shift of perception.

Microsoft’s new open strategy, expressively aimed at expanding interoperability, include a specific component, namely the Open Source Interoperability Initiative, designed to foster more engagement between Microsoft and open source communities.

Also things like the Open Specification promise – covering, among others, 38 Web Services standards and on a practical ground enabling interoperability between Microsoft technology and Apache’s Axis web services stack – are not not geared just toward open source, as proven by the existence of implementations distributed under proprietary licenses.

All in all Microsoft’s decision to define and implement an open source strategy did not happen overnight, as all initiatives above mentioned seems to be part of a much bigger picture, bringing Redmond’s giant to increase third parties’ potential. The central management of vertically integrated production stages is increasingly succumbing to the forces of specialization – a recommended reading for all people interested in the subject at large is “The Vanishing Hand: the Changing Dynamics of Industrial Capitalism” – that is especially true for the IT market. The extent of the improvements in the technology of coordination is an extraordinary enabler in this respect, and I believe Microsoft is strongly refocusing on its platform value, making the open source strategy part of such process.

Microsoft spend few years to elaborate its open source strategy, considering that Microsoft opened its Linux Lab about four years ago and started the Open Source Lab two years ago, but it sounds pretty clear now:

The Microsoft open source strategy is focused on helping customers and partners be successful in today’s heterogeneous technology world.

Let’s see now what customers and partners need to successfully adopt open source software today, and how Microsoft could fit into the picture. First let’s dip into few Open Source Market dimensions and open issues.
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Open Source Market dimensions.

Open Source it is told to be a huge market now:

Open-source products accounted for a 13 percent share of the $92.7 billion software market in 2006. Predictions set the percent share to 27 in 2011, when revenue is expected to be $169.2 billion.

Along with such success, Open Source is also seeing a dramatic growth of Internal Development, mostly among medium to big enterprises, as I also heard from CIOs at the Open Source Think Tank. Why that?
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Open Source Software Selection: the cost of free.

The number of viable Open Source Projects is pretty big (18000), but few dozens of them (maybe less) are consuming about all publicly disclosed vendor investments, and only half of the top packages lack of enterprise support. As result, the leading IT Solutions providers are still missing to deliver the Open Source Promise, but for a tiny fraction of open source platforms and applications.

Therefore Software Selection is costly with OSS, up to 40% of migrations’ support costs, as emerged within COSPA EC-funded project. All in all metrics and methods like the Open Source Maturity Model, the Business Readiness Rating and now QSOS are useful, but they do not provide any open source good directories. Again, marketplaces like RHN and SourceForge, plus directories like EOS or sources like Oholoh or FOSSBazaar are also effective tools, but you still need time and effort to sort out the selection issue by yourself.

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Customers’ and Vendors’ Perspectives.

Besides cost savings and flexibility – that allow companies to customize their IT solutions to fit their specific needs – customers want to avoid lock-in by adopting open source software broadly supported, in order to retain the possibility of changing the provider. Again, open source software selection is key to retain such possibility.

Moreover Medium to large enterprises look for medium to large IT companies, often want to buy indemnification and some form of warranty. How all this match with vendors’ perspectives?

IT vendors want to share R&D costs, but sequential innovation come with a cost related to sharing standards and it requires a symbiotic approach. Super-communities made of many open source applications are the next step, but they involve even more complex dynamics. As a matter of fact few open source products are part of a large number of different stacks, and the reason might well be that partnering and integrating with third-parties products is costly. Doing it with little hope to exclusively appropriate returns from the Commons is a risky bet. Last but not the least a strong brand is really important to open source firms, alliances and M&A are likely the most affordable and yet effective way to brand OS products sharing costs and benefits. It is probably not by casualty that we are seeing open source acquisitions happening, few consortia are forming and some technological clubs targeting vertical markets.
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Could Microsoft Open Source Strategy help the open source market?

Microsoft business model is a “platform ecosystem” business model: the more developers writing applications for Microsoft platforms, the better. In my understanding by expanding choice for consumers, also on open source applications, Microsoft is giving to more developers and partners a chance to make business together.

This business cycle is somehow reflected by the IDC’s impact model, reporting a ratio of revenue—between 6 and 18 to 1— for local software, hardware, and services firms for every dollar of Microsoft revenue in many countries. While I have no clue how such estimations are accurate, I understand that 5 millions of developers and 750,000 partners around the world are a unique ecosystem. No other IT multinational actor has a similar ecosystem, plus Microsoft differently from IBM or Sun do forego potential direct revenues for hardware sales and consulting services, leaving other space for others’ business.

In the IT ecosystem Microsoft is in the position to enable also open source application and solution providers to deliver value through their tools and components, and it is proactively working on it.

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Open Souce Heroes: Microsoft’s Open Source Developers.

Microsoft’s Hero Hack Pack, is the way Microsoft is addressing developers to provide them with a range of choices for developing and deploying Open Source software on Windows Server 2008 using Visual Studio 2008. CodePlex is where Microsoft hosts open source projects based on Microsoft’s platforms, containing about 1900 applications (150 of them have been developed by Microsoft), counting more than 30,000 users. SourceForge itself counts more than 70,000 open source projects running on Windows. The open source lab at Microsoft Port25, the Shared Source Initiative or the Ajax Control Toolkit worth all a mention as viable resources for tomorrow “open source heroes”.

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NXT, what’s next for Open Source ISVs.

Microsoft’s in 2007 launched the NXT initiative, focused on open source. The goal is to help ISVs to explore how to deliver their open source solutions to customers in the Microsoft world. The Microsoft program provide ISVs with marketing, technical and financial aid to exploit how to get the best results from an heterogeneous world. There are a lot of commercial open source software deployed on Windows as one of its platforms:

· JBoss: Claimed 50% deployment on Windows when they signed a partnership deal with Microsoft that included technical collaboration in September 2005.
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· SugarCRM: Claimed 35% deployment on Windows when they signed their technical collaboration deal with Microsoft in February 2006.
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· Eclipse: Several studies have been done over the past few years show Windows adoption for development and deployment (Dev/Dep):
(80%/60%) [Evans Data Corp., September 2006]
(62%/37%) [Evans Data Corp., September 2007]
(74%/47%) [IDC, Summer 2007]

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ISVs could consider joining the NXT ISV partner program in order to provide their customers with applications that might need to use Active Directory or other Microsoft platforms, getting access to technical information and marketing support. Macadamian, a firm with a deep knowledge on how open source change the way teams work, joined the program, If you want to know more about NXT Program read all Stephen Walli‘s posts on the subject.

Microsoft’s Open Source Strategy brought already companies like Zend, MySQL and SugarCRM to effectively deliver open source value on top of Microsoft platforms. Few days ago speaking with Dominic Sartorio, Director of Product Management at SpikeSource, I learned that SpikeSource just announced the availability of five additional PHP-based applications on the Windows Server 2008 platform as turnkey “SpikeIgnited” applications, and more are to come. Sam Ramji at the Open Source Think Tank told me that Microsoft is going to connect to many other open source firms in the next future, as to cooperate with open source communities.

Microsoft seems to be willing to play a very important role in the open source ecosystem, bringing on the table a strong brand, an impressive number of developers and partners, a specific program for coders and an initiative aimed at ISVs.

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Does Open Source at Microsoft make any sense to you now?

Technorati Tags: Open Source Microsoft, SamRamji, Open Source ISV, Open Source Developers, Zend, SugarCRM, MySQL, SpikeSource, DominicSartorio, StephenWalli, Eclipse, Port25

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3 thoughts on “Open Source at Microsoft: an analysis of Microsoft Open Source Strategy

  1. Very interesting post, and the included links are usefull resources, too. Thank you!

  2. Roberto,

    Kudos on a detailed and insightful piece…and you’re spot on about Microsoft realizing it’s value as a platform. Interestingly enough, I never bought the claims that Microsoft should have been more “open source friendly” in the past. Multi-national behemoths aren’t “friendly” to anything except what’s profitable and until recently it was profitable to attack open source with FUD and mudslinging. Now that things have changed, we’re seeing Microsoft’s strategy do the same. With that being said, I think Microsoft has more to gain than it does to lose from embracing open source. In light of the fact that its Windows cash cow is facing the prospect of stiff competition on the desktop and server fronts, certified open source stacks will stem the rising tide of migration from Windows to alternatives.

  3. Yes, whatever you say. But never, ever, give full trust to this particular company. It is in their blood, it was their very foundation: dirty agreements, patents & convenants, embrace / extend / extinguish, and other tactics that reveal its effects way after the damage is inevitable.

    These “good” news are only scary, just wait and you will surely see that Microsoft is still the same of these 30 years.

    Besides FOSS has (and will) never have any need of them to survive and evolve.

    Give up on the patents claims, and i will eat my words, until then, you can talk all what you want and open as much “oss” sites as you want. They’re all based on lies.

    Oh wait! An open source repository?? but the idea has been implemented previously by someone else…hope that sourceforge will “not sue” them!

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