In the past week, the open-source business community appears to have reached consensus: making money from open-source software is a bad model, but making money with open source is golden.
This can't be good for Microsoft.
Microsoft has long maintained that as the open-source industry has matured, it has become more and more like the commercial world it sought to leave behind. Fundamental freedoms of open source, like the right to modify source code, are signed away to secure a support contract with Red Hat or another vendor.
In many ways, Microsoft was right. Unfortunately for the Redmond giant, however, the new consensus should lead to less commercialization of open source, and more commercialization around open source. There's a big difference, and it's one that threatens to seriously undermine Microsoft and every other traditional software vendor.
That is, unless Microsoft responds in kind.
The new consensus
In fact, it's a drum I've been beating for over a year as Tim O'Reilly's wisdom on the topic finally caught up with my 33MHz brain.
There are fundamental, strategic benefits to open source: ease of distribution, friction-less adoption, costs, etc. There are also serious downsides when it comes to selling it: people chafe at paying for something if they can get it, or something similar to it, for free.
Such problems don't plague companies like Google, which distributes open-source software to drive more adoption of its proprietary advertising or SaaS services. Even Red Hat isn't really in the software business: not with its Linux distribution, anyway. It's in the business of providing certification and update services; of managing the complexity of an operating system.
It's a great business, but if you had to choose between Google's sales or Red Hat's, it's a no-brainer.
As this lightbulb goes on across the industry, companies like Microsoft, which insist on direct monetization of software, with little in the way of open-source complements to fuel adoption (or simply undermine competitors), are going to struggle. More and more companiesas open-source complements to their own.
So, here's a suggestion for Microsoft as just one good way to respond: open-source Internet Explorer.
Forget Office. Forget Windows. Forget all those other billion-dollar cash cows. Microsoft has no revenue directly tied to Internet Explorer, but IE is the gateway to the next phase of Microsoft's growth. Open-source it.
Cut Google's Chrome and Chrome OS off at the knees. Undermine Mozilla Firefox's raison d'etre. Give the European Commission a reason to love you.
More importantly, give developers something to embrace and extend. Microsoft has been steadily losing browser market share as Firefox eats into it. In some countries, like Germany, Firefox has even surpassed IE's market share.
Fight fire with fire. IE is still the world's most popular browser. Make it the world's most open browser, too.
Every Microsoft business could benefit from this move. Even if one assumes that Microsoft isn't ready to take the plunge and fully open up the development process around IE, here's some comfort:. Microsoft can still steer the IE ship, even if it were open source.
Microsoft needs a proactive open-source strategy, rather than the reactive policy it has had to date. Open source is a threat, yes, but it's a threat to everyone, especially as the industry collectively comes to grips with open source as a business enabler, rather than as a product to sell.
If Microsoft wants to win big in the new world of Web-based software, it needs a bold strategy. Open-sourcing IE is the starting point.