Subject: Re: How Microsoft Thinks
From: Russell Nelson <>
Date: 6 Nov 1998 05:05:17 -0000

DaveNet writes:
 >   As you might imagine, Microsoft is looking to embrace the ideas of the 
 >   open source world, and is thinking if it will diminish their role as 
 >   the dominant operating system software company. 

Please note that Open Source is a trademark controlled by Eric

 >   Earlier this year I made a bet with some Microsoft people that before 
 >   long they would be releasing source code as a normal part of their 
 >   development and release process. They said it will never happen. In 
 >   the memo it's clear that they're now considering releasing parts of 
 >   the Windows source code, for example, the TCP/IP stack. Although 
 >   people on both sides of this fence doubt it will ever happen, I remain 
 >   sure that Microsoft will adapt and in some ways match Linux, Apache 
 >   and Perl, and will probably embrace open source to a greater extent 
 >   than anyone now thinks possible. 

If they do that, they won't be Microsoft anymore, since Microsoft's
business model is based on having a monopoly over operating system
sales, distribution and support.  You don't get that monopoly on an
Open Source product.  They would be a different company -- still named 
Microsoft perhaps -- but a company that operates in a totally
different manner.

 >   And that's the way it will work for all software companies. The ones 
 >   that are starting around SendMail, Linux, Perl and Tcl (what else?) 
 >   will release proprietary software in binary form (many already 
 >   have)

Perhaps some will.  I notice that Redhat is moving away from
proprietary software, and just recently refused to distribute a
proprietary game (Quake III) mostly *because* it is proprietary.

 >   ***Visible Embrace and Extend 
 >   Microsoft has had recent great success with its Embrace and Extend 
 >   strategy in its competition with Netscape and Sun. It's virtually 
 >   certain that they will respond to open source with the same tactic, 
 >   that they won't resist open source, they will embrace the idea and 
 >   then take it where they want it to go. 

Sure.  They'll try.  But with Open Source, we don't have to follow.

Probably the most cogent observation made about Open Source and the
software market is Bob Young's that it's his job to turn a $5 billion
market (none of which he owns) into a $500 million market, some of
which he already owns, and plans to own more of.

Yes, you *can't* make as much money doing Open Source software.  But
you don't have to -- as the punch line to the old joke about the two
hikers and the bear goes -- "I don't have to outrun the bear, I
only have to outrun you."  Bob Young doesn't have to compete with
Microsoft, because Microsoft qua Microsoft is going to die.  He only
has to compete with other Open Source vendors.  It's all part of the
creative destruction of capitalism.

-russ nelson <>
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