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Microsoft in transition

A cautionary tale.

MINNEAPOLIS, Apr. 14, 2012. Once upon a time, one company dominated business computing. It sold all of its proprietary software in ways that forced businesses to continually upgrade their stuff under ever more onerous terms. It behaved this way largely on behalf of its shareholders, who insisted that it grow beyond the pace of the market by squeezing more revenue out of existing clients. Meanwhile, academics–who wore the badge of “hacker” with pride–created UNIX-based systems and gave their software and source code away for the sake of advancing computing science. The time was the 1970s, and IBM was the company.

Though IBM went through antitrust proceedings that ate away at its monopoly, the PC market did more to IBM’s dominance than the courts. The PC started out as a hacking tool. Most software was free for the variety of operating systems that existed. Academics and hobbyists were keen on continually upgrading their software in a community model. The variety of operating systems hindered universal adoption of PCs, but it helped hobbyists, who were always touting the latest software that let a system use a program created for another system. Though IBM initially scoffed at the PC, it found that it had to adapt quickly to this challenge by creating its own line of PCs and using its name to make them the standard. In the process, the whole culture of IBM slowly changed from forcing users to do things its way to adapting to users’ needs and preferences. That process took two decades.

Back when it had designs on the PC, IBM contracted with Bill Gates for its operating system. Unlike other personal computing software makers, Gates insisted on charging for software and was largely responsible for the intellectual- property climate that came to dominate the PC industry. Gates is famous for publicly ostracizing the many who created a patch (in a community coding process) that allowed Gates’ Basic programming language to work in the rogue operating environment. We all know who won all those (and subsequent) battles over other software products. Given that his company, Microsoft, set the terms of how software would be licensed, sold, and distributed, it should be no surprise that Microsoft came to dominate the software market, forcing business users to continually upgrade their proprietary software under increasingly strict terms.

About the time that Microsoft was ratcheting up its efforts to put the screws to its users for the sake of its shareholders, along came Linus Torvalds, the first to create an open-source variation on the UNIX operating environment for Microsoft’s chosen PC system–x86. Linux did for the academic computing community what UNIX had done two decades before: It freed it to creatively solve computing problems for the good of its community of users. Microsoft scoffed at the upstart operating system and continued to provide shareholder value largely at the expense of its users.

Though Microsoft endured antitrust measures that weakened its stronghold somewhat, Linux was the backbreaker of its monopoly. The community of Linux users grew too strong for Microsoft to ignore. It found that it had to adapt to Linux and make Linux adapt to its intellectual property climate by creating a version of Linux that worked with its proprietary software. If Microsoft held the standard on part of this system, it would eventually own the standard on the whole thing.

The historic acknowledgment of this strategy came in the fall of 2002, when Microsoft first exhibited shades of its intentions at LinuxWorld in San Francisco. Touting how the Linux environment would interoperate with its .Net Web services standard and patting itself on the back for its community of beta testers influencing development of future products, it otherwise kept a low profile at the show. The Linux community reacted hesitantly. Was this an acknowledgment that Microsoft will eventually create open-source software? Is it trying to garner support from a community it eventually wants to subjugate? No one knew. But the Mono group welcomed Microsoft with open arms. This split the community into two parts, and Microsoft used the divide-and-conquer mentality to eventually dominate the Linux environment. Mono held sway in enterprises that wanted the functionality of .Net and the freedom of Linux. But once users were locked in, Microsoft began to tighten the screws as it had done two decades before on the PC industry. And the rest is history.

James Mathewson is editor of ComputerUser magazine and

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