Microsoft admits OSS pressure will force price reductions

Microsoft made a statement in its quarterly SEC filing regarding the pressure of Open Source Software on Microsoft’s current business model, and that it may be forced to reduce prices to compete.

So does Microsoft finally have a competitor that they are genuinely worried about? At least its a competitor that they can’t buy out financially as they have done with so many small companies in the past before they matured to the stage where they may have had competitive products.

The problem Microsoft faces I believe, is that despite the huge amounts of money that they can sink into a new or existing product and the hundreds or thousands of skilled developers they may have to work on their products, they cannot compete with the many thousands of highly skilled developers that are fanatical and deeply emotional about producing Open Source Software.

The result of such a deeply committed group of people working on for example Linux, is that the quality of software is so much higher than even Microsoft’s money can buy.

You only have to ask any Systems Admin guru who has worked with both Windows servers and Linux servers which is the most stable, and the answer will be Linux every time.

Need hard facts? According to Netcraft’s ongoing server survey, in Jan 2003 the most popular web server is still Apache with 62% of the total servers surveyed and still increasing, while Microsoft’s IIS is trailing at 27% and actually started to decline in that month. You can bet that the majority of the Apache servers are running on other platforms other than Microsoft…

So how can Microsoft compete with this? Buy out all the developers who are working for free and for the love of their OSS products? Well thats hardly likely, as they are working for free because that is the core philosophy behind the OSS movement… they are not doing this to make money.

So how can Microsoft compete? Maybe they can’t.

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