Investment Viewpoint: Brad Silverberg, Managing Partner, Ignition Partners "Milestone: How does Microsoft deal successfully with the open source threat?
Silverberg: I don’t think they have figured that out yet, I think that is clear. They are struggling with not so much open source, per se, but rather they are no longer the low price solution. In the past Microsoft was the low cost solution and Microsoft was then competing and attacking expensive proprietary systems from below. Now for the first time the tables are turned and it's Microsoft that's being attacked from below by a lower price solution. Microsoft needs to figure out how it can demonstrate better TCO to justify its higher prices. Another aspect to that, which is an area I think Microsoft is also struggling with, which is when you are as successful and dominant as they are, how do you continue to foster that ecosystem? What really propelled Microsoft Windows success was an ecosystem that they created that allowed other people to benefit from your success. Actually your success was really a side effect or byproduct of their own success. If they saw a way that they could develop your platform, make money for themselves and build big businesses. Now that Microsoft has expanded into so many different areas there is reluctance from some developers to continue to invest in a Microsoft platform because they wonder how do they build a business? How does it become their business and not Microsoft’s business? So people are looking for alternative platforms that create new ecosystems that allow them to build. The challenge to Microsoft is to continue to keep that ecosystem going and to get developers and applications folks to see that there is benefit to themselves in adopting and continuing to develop for the Microsoft platform."
Via Good Morning Silicon Valley