Google is Microsoft's New Open Source 188
Robert writes "Steve Ballmer told investors recently that Microsoft's biggest challenge is embracing software-as-a-service business models, as
embodied by rival Google Inc. Investing in software as a service and advertising-supported businesses is a challenge
like that which the company faced at the dawn of the open-source movement. To paraphrase
him heavily, the takeaway was: Yes, we're investing a lot, but it's riskier, long-term,
not to do so. We have a lot of cool stuff coming up and, yes, we are also playing catch-up
on a couple of fronts. His speech came a
month after Microsoft revealed that its R&D budget for fiscal 2007, which ends
mid-2007, would rise to $6.2bn." From the article: "We've
got to make this transition, which our industry is making, from software as a product to
software as a service ... If you want to be a leading software
company, you've got to be a leading software-as-a-service company."
Nothin wrong with this... (Score:5, Insightful)
Downside! (Score:5, Insightful)
This is vaguely similar to the RIAA, etc wanting us to merely rent music, or repurchase it in a new format every so often, instead of owning it outright.
Music as a service. Software as a service. What's the difference?
Re:Downside! (Score:5, Insightful)
That said I personally like the software as a service model less than the music model. At least with the music you are constantly getting new material for the monthly price where software is (more or less) just paying for the exact same thing again and again. But thats just me and even in those cases depending on the monthly cost to "rent" vs the cost to "buy" it could still be a good deal. Anyway, I'm always glad to see more choices even it I don't happen to like one of them. Someone else might really like the other choice for some reason and I'm glad its available to them.
Re:Downside! (Score:5, Insightful)
Re:Downside! (Score:3, Insightful)
Re:Downside! (Score:3, Insightful)
For example, my $900 copy of Microsoft Office 2000 has pretty much no resale value now. Did I get $150 per year's use out of it?
Chances are that I only used 2 of the 8 programs, and those I used a lot. But did I use them enough to pay $150 a year for them? Doubt it.
Re:Downside! (Score:2)
Re:Downside! (Score:2)
To view the documents sent to you from other people who did upgrade?
I think I'd have to agree though, looking on Microsoft's website, I don't see many features that justify upgrading, especially for non-business users. There's some nifty new colaboration features, but I don't think too many people actually use those.
Pretty much, Microsoft is its own worst enemy. They've implemented just about everything necessary, so its harder and harder for people to justif
Re:Downside! (Score:2, Insightful)
Try to think of software-as-a-service similar to the way you think of electricity or water as a service. It's the same exact thing again and again, and you pay for it as you use it.
Re:Downside! (Score:2, Insightful)
1) Electricity and water are consumed in using it. The provider then has to make more, whereas with software this is not the case. With software as a service there isn't even costs of packaging, stamping CD's, buying shelf space at CompUSA, etc. IANAEconomist, but this takes a product that has a very high initial cost but then a very small cost per unit sold, and moves it into the realm of even tinier costs per unit sold. Utility companies have relatively high costs per unit sold.
2) Electricity and
Am I the only one that sees a red flag here? (Score:3, Insightful)
I'm 100% in favor of people selling what they have to sell on their own terms. And if no one wants to take those terms, they sell nothing or change models. But I get suspicious when people say "let the consumers decide if they want X or Y" and Y is blatantly inferior to X.
When millions of people seem to be choosing crippled, severely restricti
Re:Downside! (Score:2)
It depends on how it works. If paying $x/month gives me access to a suite of applications and new features and applications are constantly added, it'd be similar to the model.
There's also times I only have a need for a software once (i.e. I have an vide
Re:Downside! (Score:2)
Re:Downside! (Score:4, Interesting)
Software as a service plainly doesn't make sense for word processing or spreadsheets.
But it does for search [google.com], or buying books [amazon.com], or news [slashot.org].
The only problem (if you can call it that) is that the users are so not-locked in that it's hard to charge for the service (ok, you can charge for the books, but the users can still go to another online stop at the drop of a hat)
Re:Downside! (Score:2)
Software as a service plainly doesn't make sense for word processing or spreadsheets.
Actually, I think it does. It's been done for over 30 years, so there's nothing new about it. It's just a minor variation on the time-sharing mainframe and remote application server model. Even in a complete GUI environment, I used to regularly run expensive commercial applications off of remote servers, and interact directly with their windows through the magic of X's network transparency. It works like a charm, it
Re:Downside! (Score:2)
What you say? http://www.x.org/ [x.org] must surely have the same domain as http://x.org/ [x.org] , since the domain is "x.org", the bit on the left is configuration internal to that domain.
Anyway, www.slashdot.org redirects to slashdot.org instantly for me.
Re:Downside! (Score:2)
Re:Nothin wrong with this... (Score:5, Insightful)
Microsoft has real competition, forcing them to develop better, more competitive software. Downside?
The downside for Microsoft is that they are their own worst enemy. People already pay Microsoft for their software (either embedded in the cost of a PC or at the store for things like Office) . Now Microsoft is in the tough position of getting people to transition from paying for software upfront to paying for it as a service without people realizing they are getting the short end of the stick. This will be much easier with things like office and other products you typically buy in the store. For things like windows, it will be hard to convince people that they need to pay monthly to use their PCs after they have already paid up front for the hardware and OS. Of Microsoft makes it too painless, they shoot themselves in the foot by not making as much as they could. If they make it too painful, they stand to lose marketshare, especially if companies like Novell and IBM come out and really pump the idea that you don't have to pay to keep your Linux machines running.
Re:Nothin wrong with this... (Score:3, Funny)
Re:Nothin wrong with this... (Score:3, Insightful)
Where did you get 'web' from?
Re:Nothin wrong with this... (Score:2)
Basically, software as a service authenticates itself every month. If you stop subscribing, you either stop getting updates, fixes and support, or the software could stop alltogether. Ideally, you need lots of
Re:Nothin wrong with this... (Score:2)
And they'll sell it by telling people all the wonderful things they get by subscribing, like security fixes. Of course they won't call them security fixes, they'll call them "Enhancements" or something.
A lot of people who are clueless about this sort of thing will imagin
Re:Nothin wrong with this... (Score:2)
Which is exactly why it will never happen.
Re:Nothin wrong with this... (Score:2)
http://www.apple.com/ [apple.com]
http://www.debian.org/ [debian.org]
http://www.openbsd.org/ [openbsd.org]
in case I missed somebody
( I could go on and on here, no offense to any I left out )
The fanboys are right. (Score:2)
You wanna play games? Buy a games console.
You wanna have a general purpose machine? Use something open, I would say Linux.
Your problem is that you insist in playing games for a machine that is not designed to do so. Well, pay the premium for it, but there are clea alternatives, you are just chosing to be locked.
Re:Nothin wrong with this... (Score:3, Insightful)
From who in what market? MS makes money selling software, Google sells advertising. Everything else either company does is a loss leader/R&D project.
Re:Nothin wrong with this... (Score:5, Insightful)
The competition is an illusion.
Google exists in an entirely different sphere of influence than Microsoft. Microsoft is not protecting its base against competition so much as it is doing what it has always done:
Found out that someone else is making money and trying to muscle in on it.
Microsoft is in the software business. Google is not in the software as service business. They are in the advertising business, just as a billboard company is not in the real estate business, even though they must interact with the real estate market in order to sell their advertising product.
And the only people demanding "software as a service" are the advertising buyers/sellers.
KFG
Re:Nothin wrong with this... (Score:3, Informative)
They are also in advertising bussiness [msn.com] as well. Same way as Google is in.
Re:Nothin wrong with this... (Score:2)
I disagree. Google is in the software business, they just finance it through advertising. They employ more programmers and developers than advertisers and marketers, and produce far more data than they do ads. They must interact with the advertising mark
Re:Nothin wrong with this... (Score:2, Insightful)
This is the fundamental conceptual mistake of business.
. .
A business is defined by what provides it with profit. The source of the profit is the "consumer."
The source of Google's profit is advertising. The advertisers are the "consumer" of Google's product. You, as a user of Google's services are the
Re:Nothin wrong with this... (Score:2)
Downside: Microsoft will not try to "compete", per se, but attempt to bully, cajole, and acquire others to do most of their dirty work, while spreading their cantankerous software as a service as well as POS, thereby increasing its complexity and opening up all sorts of new security holes.
Of course, if you want to call that a downside...
Re:Nothin wrong with this... (Score:3, Insightful)
What makes you think software-as-a-service is actually better?
The key advantages to software as a service is not for the customers, it's for the software companies.
There are three major reasons Microsoft wants to embrace software as a service so fast:
1. the vendor stays in control of usage;
2. there's no possibility to pirate a service;
3. A product you sell as a license that lasts forever (too many people happ
Re:Nothin wrong with this... (Score:2)
Pretty smart, except Cable TV is a one-way stream, I bet your TV doesn't communicate with your Cable provider using personalized login and settings
You just have a card to decrypt a set of incoming channels and that's it.
Re:Nothin wrong with this... (Score:2)
Microsoft has real competition, forcing them to develop better, more competitive software. Downside?
The Downside. [google.com]
Re:Nothin wrong with this... (Score:2)
Of course, given their portfolio, it is possible for them to offer more in the long run but it makes their entire arsenal of code meaningless in the short term; they will have to figure out how to transition their portfolio of code into something that is service oriented and then integrate them together in a typical Microsoft fashion WITHOUT being an
Re:Nothin wrong with this... (Score:2)
In fact in the last two years, Microsoft LOST 5% of the market share (prior to paying off Blow Dady).
So I hate to tell you this but the Microsoft PR
Re:Nothin wrong with this... (Score:5, Funny)
Re:Nothin wrong with this... (Score:5, Insightful)
Re:Nothin wrong with this... (Score:2)
Re:Nothin wrong with this... (Score:4, Insightful)
I think the point was that once competition has been squashed they would be able to slack off and not worry about customer satisfaction.
I think the market will tend to self correct, but it takes longer to correct if there is an effective monopoly with no viable competition. Having a competitor in the ring forces a business to respond to customer needs more quickly.
OK. Turn off slashdot. (Score:5, Funny)
All the key memes are there.
We need continue no longer.
Re:OK. Turn off slashdot. (Score:2, Funny)
Re:OK. Turn off slashdot. (Score:5, Funny)
Re:OK. Turn off slashdot. (Score:2)
Ah, Microsoft's perpetual state... (Score:4, Insightful)
Re:Ah, Microsoft's perpetual state... (Score:2)
Not challenging enough (Score:3, Insightful)
The 'software as a service' structure could be one of the worst ideas ever. Google offers actuall services, to mix it up, Microsoft on the same terms would be taking the whole idea out of proportion. You don't want to have to, essentially, RENT Microsoft Exchange Server, for example, would you? As compared to Google, the software they do distribute is completly free.
Funny you should mention (Score:2)
Especially true for front-facing software (Score:2)
Um...their new? (Score:2, Redundant)
Re:Um...their new? (Score:5, Interesting)
Nah. Microsoft can't concentrate on more than one opponent at a time.
The funny thing is, I can't tell whether I'm being facetious, either.
Re:Um...their new? (Score:2)
Thanks for clearing that up.
Cross analysis of Ballmer's comments (Score:2)
Software-as-a-service (Score:2)
Re:Software-as-a-service (Score:2, Insightful)
In Capitalistic society commerce controls the government
Re:Software-as-a-service (Score:2)
'tween you'n me, that's the punch of the "In Soviet Russia" jokes, that it's the other way 'round in the "free" world.
And that's what MS doesn't really get (Score:2)
Google works by the "give a little, get a little, do it often, get a f..ing lot!" principle. You can of course buy their servi
Is this something new... (Score:2)
Re:Is this something new... (Score:2)
So have I, and I haven't yet seen any software-as-a-service that I'd be willing to pay for.
Why is everyone chasing this if nobody but the software businesses really want it?
Re:Is this something new... (Score:2)
I'm not renting software (Score:5, Interesting)
Lots of the software that I use on a daily basis hasn't been updated in years. This is especially true of expensive packages like FrameMaker (5.5.6), Illustrator (v 10) and other software I purchased for consulting work back in the day. I'm not dropping another $600 on FrameMaker for the minimal feature updates (although I hear 7.0 has multiple levels of undo
I run Office 2000 (it came "free" with a PC) on my one Windows box, and don't see a compelling reason to upgrade. I certainly won't be paying Redmond a monthly rental fee to run an office suite. I allow Google to display ads, but I'm not paying Google any actual cash and I've pretty much trained myself so that I don't even see the ads anymore. Ballmer & company still don't get it.
What's funny is MS not seeing that (Score:4, Insightful)
MS sells primarily Windows and Office. As I understand it, that's where their primary revenue comes from.
Windows 2000 or XP should be good for a long, long time. Remember Ballmer's famous "developers developers developers"? What's implied in that is that the developers want to reach as wide of a target as they can - that's why they're writing for Windows in the first place. The wider the target, the more software the developers sell. In short, to be operable on all flavors of Windows. Just last year I worked on a product and as part of QA we had to verify that it ran on Win95! Versions A and B!
So IMHO, that pretty much makes Vista optional - and it's going to be for a long, long time. Unless MS figures out some amazing way to get the developers to aim for a smaller locked-in target. I mean, think about how many machines are out there running XP today. How is MS going to tell all of those people to stop it, upgrade, and start paying MS rent?
And as for Office, if it's on a pay-as-you-go model, no business will stand for that for the same reasons. Again, they're competing against earlier releases of Office. And OpenOffice. Soon as a halfway competent accountant runs the numbers, the pay-as-you-go model will be avoided.
I'll betcha Vista and pay-as-you-go winds up being Microsoft's next Windows ME. Nobody will touch either with a ten foot pole.
Re:What's funny is MS not seeing that (Score:2)
It depends on how they go about it, and whether or not the company is currently established. For example, if they let you buy office for $500 (just throwing out a number--no idea if it's high or low compared to current) or rent
Re:What's funny is MS not seeing that (Score:2)
In the business world, I wouldn't doubt it. But they are fuxxoring consumers making DX10 Vista-only, which means if you want to game 'with eye-candy', you need Vista.
They are??? Holy crap!
Makes me wonder how many game developers are currently writing DX10 games.
"Let's see...there are X 100 million DX9-WinXP boxes out there, and a few hundred Vista boxes in beta...and if I write my game for DX10, I lose the X 100 million XP customers....hm...."
Another funny thought: What if Transgaming adds DX1
Re:What's funny is MS not seeing that (Score:2)
Then by all means enlighten me.
What's the "eye candy" that DX10 offers that DX9 doesn't have? I've seen that referenced here a few times. "Eye Candy". What exactly is it? DX9 is pretty thorough as is. What's added that's worth the bother?
Please show me the spec that says DX10 games will run on DX9 systems. I know a lot of DX9 games won't run on DX8, so this seems like a breakthrough. I'd like to read more about it.
Re:What's funny is MS not seeing that (Score:2)
Summarizing your last post:
DX10 adds more triangles and moves some of the physics to the card. Here is some info that says XP won't have it. And I can't find any info to support my backwards compatibility claim, so here is a link to Google so you can go find it.
Thanks.
Re:What's funny is MS not seeing that (Score:2)
My very thought.
When it happens (Score:2)
Microsoft really needs to focus on it's core product, Windows. Get it out. Get it working well. All funds should be directed towards that.
Re:When it happens (Score:2)
Standard Microsoft technique, throw money at it (Score:2)
Microsoft, the new Linux provider (Score:4, Insightful)
So maybe it is not time to dump your MS stock just yet.
Like with the Xbox they would enter a competitive market. Maybe then they will make better products. At least they should be able to, considering all the brain power they are sucking up every year.
Re:Microsoft, the new Linux provider (Score:2)
*shudder* - That was gross!
Re:Microsoft, the new Linux provider (Score:2)
MS *and* open source (Score:2, Informative)
http://dotnetnuke.com/ [dotnetnuke.com]
http://listring.com/ [listring.com]
Re:MS *and* open source (Score:2)
You forget one thing: This piece of software depends on non-free software, which means you have a vendor-tie-in. I can not use this product without MS software. That means the software is useless in a free-software world. Read RMS' thoughts on java, Free But Shackled - The Java Trap [gnu.org] for more thou
Wow. (Score:2)
"We've got to make this transition, which our industry is making, from software as a product to software as a service
Software-as-service (ie charge me every time I use it) instead of Software-as-product (ie I buy it and OWN it forever). Sound vaguely familiar?
Mr Ballmer, see, it's not that the industry is making this mystical transition.
The Day Microsoft Makes Something the DOESN'T Suck (Score:2)
OK, all kidding aside I'm pretty sure Microsoft will stay afloat in the software as a service industry. After all it's only web stuff. While the web is a lot more complex than it was at the dawn of HTML/HTTP, it's also very limited. The most that web apps can achieve are consumer level apps that lots of Joe and Jane Averages use. ie. they aren't targetting REAL users yet. They're only going for the majority of users, so... ho hum. More of the same. Where G
Re:The Day Microsoft Makes Something the DOESN'T S (Score:2)
Re:The Day Microsoft Makes Something the DOESN'T S (Score:2)
Re:The Day Microsoft Makes Something the DOESN'T S (Score:2)
Personal use is not the only revenue stream (Score:4, Interesting)
Our personal thoughts about Microsoft, Pro or Con, are not that relevant in the larger scheme of things. If we look at Microsoft's total suite of products as a fairly well integrated (and improving) stack of platforms, tools and user interfaces for collaborative work, then the move to Software as a Service is both logical and perhaps ultimately the way everyone will go.
There are some many possible threads here that it's not possible to give a coherent discussion when I'm here at work, but here are some of the ideas that come to mind as an advantage of the concept from a somewhat Microsoft centric perspective:
Shortness of time limits clarity on these ideas. Resolving them in our discussions here can be fun, but I think Microsoft should pay us for the privlege. Don't you?
These are all areas where Microsoft can bring a very rich user experience that will drive the competitors to greatly improve their offerings. It will also force Microsoft to be more open and accessible to other vendor's products, solutions and open standards. Resolving all the issues involved will take a long time. I've been involved with these discussions for over a dozen years now. I expect it will take another dozen for these things to work as well as we imagine them to.
There's another point that's been made by others too. Moving from a license per box to a license per use and even mostly free stuff business model will be painful. Look at Novell. One of their biggest revenue problems is that the move to FOSS has occurred more quickly than they expected driving revenues down faster than they'd planned and could adjust for.
Microsoft will feel similar pain, but is learning from all the pioneers how not to get shot in the back. It is what they are best at
Transitioning to Irrelevance (Score:5, Insightful)
A hammer is not a "service." A paintbrush is not a "service." A car is not a "service." They are tools. And, unless people use them very infrequently, people don't rent their tools. They buy them so that they may own them. Software follows this analogy to a very high degree. Software is a tool and, as such, the market for "rented" tools is way way smaller than the pundits are predicting. This will become even more true as Open Source solutions continue to make inroads and force aside overpriced proprietary solutions that are buggier and offer almost no extra compelling functionality.
Microsoft does know how to Pwnz0r and expand existing markets but, so far, they have largely failed to create new ones. Software-as-a-service is a dead end, especially for a company the size of Microsoft.
Schwab
Re:Transitioning to Irrelevance (Score:2)
Microsoft Has been pushing this for a while now (Score:2, Insightful)
A monthly subscription software as a service model won't work that well, especially if microsoft is dumb enough to actually charge their monthly(or yearly, whatever) fee for windows itself. I don't think microsft would ever be that stupid but, things can change. Either way I don't think it would fly well with consumers who already pay an arm and a leg for M$ Software(which is mostly crap anyway) to pay for it again and again. Anybody who
but... (Score:2)
It will look all the less as MS will then be
Software as a Service (Score:2)
Just when Windows becomes bearably funtional and stable, and the Office suite is mature enough that the average user could run WinXP + Office XP for 10 years without having any reason to upgrade, then they decide that "software-as-a-product" is dead, time to make you start paying monthly for software-as-a-service.
I'm surprised the furniture industry hasn't gotten in on this. Why do they sell chairs, tables, and sofas that last upwards of 10 - 20 years. Clearly the industry should get out of the "fur
What's the problem? (Score:5, Insightful)
Service based software has many revenue streams and powerful advantages. First, it'd be great to have a virtual desktop that followed me whereever I logged into. Not only do my files follow, but I can login to a kiosk and actually edit my Powerpoint before a presentation (without the danger of locally saving it). This is a great model (with enough bandwidth) that facilitates collaboration and mobility.
Second, many companies are already paying through the nose for a similar model. We pay hundreds of dollars/year/user for PC service support with software. Many folks only occassionally use the MS apps, but we have to buy licenses for each PC. It would be FAR cheaper if we could centrally host the applications and pay by usage. And this would also enable us to automatically backup files and allow users to access programs from home. Users often lose data when their desktop crashes. No more with service-based software!
Third, look at the Turbo-Tax model. It's $70 for the desktop version (PLUS electronic filing fees) and $20 online with FREE electronic filing. The service based model would be similar. Pay $500 for MS Office or $40/year to use/access the same thing. It's likely to be MUCH cheaper.
Fourth, they'll also license it to folks like Google who will then provide it to us for free (or VERY cheaply as a premier member) as a service and part of their total desktop management.
Just wanted to point out that there's many good things about this. Dismissing anything MS does simply because it's MS totally misses the point. Sure, it could (and might) suck, but it could also be a great thing.
Re:What's the problem? (Score:2)
Let's examine the implications of the two models for the consumer:
1) You spend several hundred dollars
Re:What's the problem? (Score:2)
And let us look at the other model you so willingly to miss. I type up my mother's will on great software for $20/M. Why? Because - Insert 20 year old girl voice - "Everything is typed up in Word - it has been that way for ^ages^!" Do I pay that in perpetuity to keep that document upgraded? Or do I find out years from now the rules (and fees) have changed? That is a *person's* POV - and as a company it is scarier yet. All your data, all your corespondence, all your spreadsheets, visio digrams, publisher ha
Re:What's the problem? (Score:2)
Re:What's the problem? (Score:2)
Who (consumers) are following the .... (Score:2)
I believe the article is a bit intentionally mis-leading....
My response to the article title (Score:2)
software as a service == Linux Distro? (Score:2)
They don't get it (Score:2)
But renting software? That'
Re:Microsoft's business model will be the hurdle (Score:2)
Mod Parent Up... (Score:2)
Right. The success of their office productivity suite will make it very hard for Microsoft to transition to SaaS as a company wide business model. They can certainly create new revenue streams in a SaaS model but they have too much investment in software for the client's machine to ever truly embrace the thin-client approach that makes sense for SaaS.
Re:Missing the Point? (Score:2)
Oh yeah? Well, I'm gonna go build my own software! With blackjack! And hookers! In fact, forget the software!
Re:Comp Sci Grads rejoyce -- Stockholders weep (Score:2)
SELL!! SELL!!!
plenty of other expenses (Score:2)
You're forgetting support staff, administrative staff, machine costs, cost to either rent or build office space, etc. Not to mention that benefits for employees are going to cost around as much as their salaries, give or take. With researchers, you also have to pay to send them to conferences so their work gets heard. And don't forget that Microsoft Research sponsors a numb