Feeds

Microsoft should starve on radical penguin diet

Capitalism and open source

Top 5 reasons to deploy VMware with Tegile

Open...and Shut When the mouthpiece of American capitalism calls a company a dog, it's time to re-evaluate that company's chances.

In Wednesday's Wall Street Journal, columnist Holman Jenkins, Jr asks if "Steve Ballmer is a failed CEO?" then forecasts Microsoft's feeble future even as it banks record profits. Microsoft is a company stuck in the glory years of the 1980s and 1990s - truly glorious years for a company that built not one but two massive cash cows: Windows and Office.

To remain relevant in the future, however, Microsoft must build a third.

It's not enough for the company to hunker down and fetish past success, grand as that success has been. For one thing, Microsoft's cash cows are under serious threat as computing leaves the Microsoft-dominated domain of desktop computing and transitions to a variety of mobile devices.

Those devices don't do Windows. They run Apple's iOS or Linux variants like Google's Android.

Microsoft needs to make some big, bold bets, but the company is held back from this by its cash cows, as Jenkins argues:

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...

What the company should ... do now is sharply lift its regular dividend and then promise to keep lifting it, so management will have to strain and push to reinvest in its core business while still meeting its dividend commitment to shareholders. Mr. Ballmer or whoever succeeds him needs to be placed under relentless daily pressure to distinguish between necessary spending on the business and pursuit of me-too products that don't serve shareholder interests.

Microsoft needs to feel hunger, in other words. Putting its feet to the fire by reducing its cash hoard is one way. But where should it place its bets?

One big bet Microsoft should make is on open source, the tool of the underdog, a label that is coming to fit the Redmond giant.

Yes, Microsoft is increasingly dabbling in open source, but the company needs to get more than its feet wet. It needs to dive into open source head first.

Open source would pave the way for Microsoft to be more relevant on the web, as Mitch Kapor has argued. If Microsoft wants to compete with Google - and it must - then it's going to have to significantly sharpen its web arsenal.

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.

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.

Instead, Microsoft should consider acquiring Novell's SUSE Linux business and focusing it completely on mobile. Novell has a seat at the Linux Foundation's MeeGo table, and Microsoft should embrace that operating system rather than its myriad (but universally unsuccessful) mobile variants of Windows.

SUSE may be losing market share on servers and MeeGo may be the new kid on the block in mobile, but both are well-engineered distributions that would give Microsoft a fighting chance in mobile. The former comes with a host of great engineers and the latter also puts Microsoft on the same side of the mobile war as its long-time ally, Intel.

Microsoft may still appear to be the 800-pound gorilla to some, but despite its profitable billions, it's a company struggling to bridge its past to a vibrant future.

Open source offers the company a way to keep its Windows and Office billions while charting a course toward its next one or more billion-dollar businesses. It's a big bet, but given its failures with KIN and Zune, it's about time for Microsoft to take a much bigger risk on open source. ®

Matt Asay is chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfreso's general manager for the Americas and vice president of business development and he helped put Novell on its open-source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears every Friday on The Register.

Intelligent flash storage arrays

More from The Register

next story
Netscape Navigator - the browser that started it all - turns 20
It was 20 years ago today, Marc Andreeesen taught the band to play
Sway: Microsoft's new Office app doesn't have an Undo function
Content aggregation, meet the workplace ... oh
Sign off my IT project or I’ll PHONE your MUM
Honestly, it’s a piece of piss
Return of the Jedi – Apache reclaims web server crown
.london, .hamburg and .公司 - that's .com in Chinese - storm the web server charts
NetWare sales revive in China thanks to that man Snowden
If it ain't Microsoft, it's in fashion behind the Great Firewall
Chrome 38's new HTML tag support makes fatties FIT and SKINNIER
First browser to protect networks' bandwith using official spec
Admins! Never mind POODLE, there're NEW OpenSSL bugs to splat
Four new patches for open-source crypto libraries
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.