Forget the freedom that open-source software affords, Microsoft Corp is unashamedly fixed on the commercialization kick-backs of the technology, said a Microsoft executive at the recent Open Source Business Conference in San Francisco.
Speaking to a standing-room only crowd of open source startups, investors and lawyers, Bill Hilf, director of platform technology strategy at the company, outlined why, from a business perspective, Microsoft is involved with open source.
Microsoft views open source through the lens of coopetition from commercial and open-source strategies at the same time, Hilf said.
Coopetition, or simultaneously cooperating and competing with rivals, has long been Microsoft’s broader business strategy. But Hilf gave an insight on how open source fits into this plan.
Making money matters. More importantly, making money sustainably matters. Being a successful commercial software company is very hard … staying successful is even harder, Hilf said. Developing coopetition strategies is a great way for growth in this environment and we’re seeing that today.
He cited several examples of Microsoft coopetition partnerships. For example, Microsoft competes with Apple Computer Inc on the desktop, but also sells a Mac version of Office. Why? There was an opportunity there we could capitalize on, Hilf said.
Microsoft also has coopetition with Sun Microsystems Inc. Outside of settling a bunch of legal disputes and money exchanging hands, we do a lot of work together, Hilf said of Sun.
Hilf also spoke about Microsoft’s partnership with open-source outfit JBoss Inc.
At first, the idea of an open-source Java application server might seem a little orthogonal to a Microsoft business model, but 50% of their customers are our customers too, Hilf said. At the end of the day, we’re interested in it from an opportunity perspective, not because we necessarily like Java.
When it comes to open source, he said value matters. It’s critical. I personally don’t believe tech support calls for a commodity product is sustainable, he said.
Challenges of working coopetively in the open-source space include the balance between competing and cooperating with a rival, he said. Perception also is a big challenge for the software giant. In many regards, the Microsoft open-source story lends itself to a great metaphor of David and Goliath, he said. That is a challenge over perception.
There’s also the problem of the observer effect, which is potentially changing an environment being part of it. This is the important part for Microsoft, he said. We have an impact from what people call the ripple effect … What would actually happen if we were in that environment?
The elephant in the room in the open-source industry, Hilf said, is how much of the new business models are going to be like the old business models, particularly when it relates to monetization. Will we make as much in these new markets?