Two years ago, software engineer Shaun Walker got an e-mail from a Microsoft product manager, suggesting ways to keep Walker's development project from foundering.
That led to a meeting at Microsoft's Redmond, Wash., headquarters, where the software giant decided to provide Walker with a business mentor and Internet hosting. But Walker had one important stipulation: He insisted that his Web content management system, built atop Microsoft's Windows and .Net software, be free and open source.
Surprisingly, Microsoft--once the sworn enemy of open source--went along. "They've been supportive in many ways," said Walker. "To be competitive, they have to adapt to the changing landscape."
Microsoft's commitment to Walker's product, now called DotNetNuke, underscores an ongoing shift in Microsoft's stance toward open source.
Chief Executive Steve Ballmer once famously called Linux and the open-source philosophy a "cancer." Now it's a fact of life in the software business.
In the past few months, the company has committed to working with open-source products--to a point--and shown a willingness to adopt aspects of the open-source development model, according to Microsoft managers and partners.
For example, Microsoft customers can oversee Linux servers with Microsoft's management software, and they will eventually be able to run Linux and Windows on the same machine--a startling change from previous policies. Over the past year, Microsoft has also released a number of development tools with their source code--a practice the company said it intends to continue and expand.
To be sure, the moves are more self-serving than philosophical. By accommodating open source, Microsoft endears itself to potential corporate customers, notably software developers, and it better understands its open-source competitors.
Ballmer has even changed the rhetoric: "We compete with products. We don't compete with movements," he said in a recent interview.
Getting a handle on open source
Many industry pundits contend that open source poses the biggest competitive threat Microsoft has ever encountered. The model of making software freely available and allowing changes to the source code hasn't yet radically altered some products, such as Microsoft's powerful desktop software franchise.
"They've been supportive in many ways. To be competitive, they have to adapt to the changing landscape."
--Shaun Walker,software engineer
But the impact of open source on the software infrastructure arena, including server and programming software, has been dramatic. Linux server revenue is growing faster than Windows, according to research firm IDC, while the server middleware and tools market is following the path set by Linux adoption.
Microsoft responded to Linux specifically with its "Get the Facts" campaign in 2003, which looks to quantify the overall cost, or total cost of ownership, of freely available Linux software versus Windows Server.
In its product development, Microsoft has segmented the areas where Linux, as well as other products, such as the Apache Web server, are strong and has sought to match those offerings' features head-on.
These more measured competitive tactics stand in contrast to the reaction Microsoft executives displayed a few years ago as Linux's popularity grew.
In 2001, chairman Bill Gates, for example, cautioned against the "Pac-Man-like nature" of the general public license (GPL), which is used with Linux and many other freely available open-source products.
Since then, however, the open-source industry has matured and become more commercial, which has helped crystallize who Microsoft's competitors are. Instead of combating the Linux and open-software "movement," Microsoft can now target established companies, such as Red Hat, Novell or MySQL.
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