November 14th, 2006
Microsoft The Ecosystem Player -- Love Thy Enemies or Just Co-opt Them?
Yesterday's Internation Herald Tribune has an article that highlights yet another in a continuing series of moves by Microsoft to expand its ecosystem and, in doing so, bring on board companies and technologies that would have seemed anathema to Microsoft not a short while ago.
The new Interop Vendor Alliance (oh ye copyright mavens, isn't there a little conference with the same name that might be just a little miffed? Or maybe they're in on the deal too?) is intended to bolster connectivity between Microsoft and an interesting assortment of competitors and putative partners. The IHT article alludes to a total of 22 companies that will be early members of the Alliance, including the likes of Siemens, NEC, Business Objects, Sun, and Novell. (For a more complete list see Martin LaMonica's article on the deal.)
The last two companies should fire off a few neurons in anyone's catalogue of co-opetition partners: Sun, which settled a major rivalry with Microsoft back in 2004, to the tune of a couple of billion Bill-bucks and some IP and royalty exchanges, just recently released a GPL version of Java (further proof that Sun has no clue how to monetize its vast software holdings). That deal, fellow blogger Mary Jo Foley speculates, rightly I believe, will also have a direct impact on Microsoft as well (my guess — it's a "can we have a play date" call from Sun's Jonathan Schwartz, who's hoping he can get his Java toys into the Microsoft sandbox in a bigger way).
Novell, in case you were asleep two weeks ago, cut a deal with Microsoft to cross-license and otherwise collect some Bill-bucks for its Suse Linux distribution.
So what's goin' on? Microsoft, always interested in being the center of the IT universe, has realized that the carrot is just as good, if not better, than the stick. Remember the key component of an ecosystem strategy — to paraphrase an old Ann Landers column on whether a husband is considered a philanderer if he looks at another woman — it doesn't matter where a customer works up an appetite as long as they come home to Microsoft's technology to eat. So what if a customer is using Linux, Java, Business Objects, or something from Software AG (whatever) as long as the main platform comes from Redmond.
This is yet another example of how smart (and/or devious) Microsoft has become in a market where its traditional monopolies are more and more threatened. I would argue that, done rightly, being the owner of a software ecosystem could be even a better deal than just bludgening the market with monopolistic practices. We'll see in a couple of years as this strategy unfolds. And unfold it will. Watch the database space — that's my guess as two where Microsoft's velvet ecosystem hammer strikes next.
Joshua Greenbaum's opinions on enterprise software have annoyed enough vendors that he now checks under the hood of his PC every morning before he boots up. For disclosures of Joshua's industry affiliations, click here.
