Almost, but not quite …

Matt Asay has an interesting article at The Register. In it, he argues that Microsoft needs to adapt to the world that has evolved around it, and do something drastic. This article references a Wall Street Journal article/post on the state of Microsoft and the lack of motion of its share price over the last decade.

In the quoted WSJ article, Matt points to a paragraph that I’ll repeat here:

Even disregarding Microsoft’s bubble valuation when Mr. Ballmer took over in 2000, the stock has been the proverbial dead money for a decade … At bottom, this is a corporate governance problem. Manifestly, the solution is not to let management keep stepping up to the plate with shareholder money and promising home runs that never materialize…

That is, hold them accountable for failure, and more to the point, question the business objectives and assumptions behind various efforts.

One obvious one is HPC. How, exactly, is Microsoft planning on turning its HPC offering into a billion dollar per year revenue source, rather than a loss maker?

There are other obvious ones, such as the Kin, WinCE, etc.

I’ve argued in the past that they are trying too hard to be all things to all people. Going after Google in search, and failing … again, and again, and … Building an Xbox game console, and not making much money in that division. And so on.

Matt argues that they should go long on open source. I agree, but in a different way than I think he opines in this article.

He argues

Forget loose distribution agreements for Drupal and better interoperability with PHP. Microsoft should consider acquiring Acquia and thereby bringing Drupal (and Acquia) founder Dries Buytaert into the fold. It should be looking for ways to aggressively woo the Linux, Apache, MySQL and Perl/PHP/Python crowd to Windows plus AMP and, frankly, to embrace LAMP developers for everything but Windows.

I don’t quite agree.

Then he goes on

But let’s not stop there. Microsoft also needs to go deep on Linux. Yes, this is anathema to the Microsoft faithful. But I’m not talking about porting its applications to run on Linux, nor am I suggesting that Microsoft replace Windows with Linux as its desktop and server operating system. That would be madness.

I agree they need to go deep on Linux. He later suggests buying SuSE. I’d argue they should buy Redhat.

He thinks they shouldn’t port their apps to Linux. I think they should. It increases the size of their addressable market. Which is something they desperately need to do.

He thinks they shouldn’t replace Windows with Linux for desktop and server. I’d argue that they need to make them seamlessly and painlessly interoperable. I think the best way to do this is to move the application level API and services API to Linux. Source code wouldn’t need much change if any. And again, this would increase the size of their addressable market.

Moreover, it would enable them to withstand the onslaught that looks like is going to start coming from Oracle. Oracle has OEL and Solaris. I’ll argue the latter doesn’t matter so much in the scheme of things, but it would surprise me to see Oracle pushing Windows hard given its investments and ownership of other competitive technologies.

In fact, I’d argue that both RedHat and SuSE are likely acquisition targets as the larger tier 1’s vertically re-integrate. If Dell snarfs RH, I’d bet on IBM or HP to grab SuSE.

Unfortunately, as the WSJ article implies, there may be reasons other than valid business plans that underlie some of the MSFT actions. Corporate ego is possible … it sucks to have to admit you were wrong about a market, or a strategic direction. But it sucks worse to shovel that money down a money pit.

If MSFT does try to out-Apple Apple … I’d say that the tenure of its CEO would probably end when its effort fails. Which likely would be within a few months of its launch. Apple is very good at making easy to use and enjoyable products. Microsoft … er … not so much. Its a very hard uphill battle, against an entrenched competitor, who does a better job than you at making things easy to use.

So I don’t quite agree with Matt on what MSFT should and shouldn’t do … then again, MSFT doesn’t pay me for my opinions, or for anything else.

MSFT needs to go long on open source, embrace the penguin, and do it better than anyone else. In this way, they significantly expand their addressable market. Which is what they need to do.

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