The scenario that plays out in the next few years will likely have more twists and turns, IMHO, and Microsoft is hardly dead, or even in remote danger of dying. The software industry is maturing very rapidly, however, and the endgame is not what anyone would have predicted even 5 years ago. Open source software is not going away: indeed, I think 10 years hence some form of open source will be embraced by all players including Microsoft (prediction: Longhorn will never ship, but 'MS Linux' will).

MS is the only big player that isn't using open source at some level, as I write this: IBM, Sun, Apple, SGI, Novell and pretty much any large, potentially viable tech company I can think of is embracing open source. MS has even said they are studying open source to learn how to be better at software development.

I think it's clear that Microsoft's pricing is ultimately not going withstand the pressure of open source, especially in markets that have potential for high growth rates, like China, Brazil and most of the developing world. Indeed, MS' current pricing would act as a brake on the development of those markets. Microsoft's 'beat Linux fund' and discounts like the 95% recently offered to the Thai government are likely portents for the future.

MS won't just go away however. I think it likely it will slowly move away from being a technology company at some point, and become more like a bank or financial services company. 100 years ago General Electric prospered when electricity was introduced by making motors and generators. Nowadays it is as much a finance company as it is anything. That's my guess for where MS is headed. I think the timeframe for the Microsoft transition will be much faster, however. More like a decade than a century...
Comments 9:48:31 AM    

Chris Gulker's view from Silicon Valley - in words and pictures