Remember today's date: January 22, 2009. It may go down in business history as the day that it became clear that proprietary software had been broken by Linux and open-source software.
First, Microsoft had its biggest layoffs in the company's history. Yes, Microsoft still makes billions, but, for the first time ever, Microsoft is staggering.
It's actually worse than it first appears. The headlines talk about 5,000 jobs lost. They don't point out that Microsoft is also cutting up to 15% of its temporary and contract workers. Over the last few years, those are the people who actually do a lot of Microsoft's day-in/day-out work. People who insist that everything is the same as ever with Microsoft have been missing that Microsoft has actually done worse than the general economy. Microsoft stock is worth about half of what it was last year at this time.
Sure, part of that is the economy going down the toilet. Never forget, however, that Microsoft has been heading for trouble ever since it became clear that Vista was going to be a disaster.
As for Sun, for years Sun had a love/hate relationship with Linux and open source. Sun, finally got the open-source message, but it may have gotten it too late.
While there's still no official word from Sun, the cuts are coming fast and furious. If you want to feel blue, go over and visit Sun's blogs. There, you'll find good-bye notes from some of the best software and hardware people in the business with decades of experience being laid off.
You could argue that Microsoft is just cutting fat. That argument can't work with Sun. Sun is cutting muscle.
Novell, on the other hand, while still struggling with getting out of the service business and back into being a pure operating system and software play, continues to make more and more money from Linux. This, I might add, is happening despite the fact that Novell doesn't have a good reputation with many Linux users.
In the meantime, Red Hat is doing better than ever. They just released a new version of their flagship operating system, RHEL 5.3 (Red Hat Enterprise Linux), and, unlike Sun or Microsoft, they have new customers coming in.
In fact, as my fellow open-source and Linux watcher Matt Asay points out, Red Hat's market capitalization may soon actually surpass Sun's capitalization. Of course, You'd be right in pointing out that, even now, Sun's make billions while Red Hat makes hundreds of millions.
That means less than you might think. The business world sees companies moving forward (Red Hat and Novell) and companies sliding backwards (Sun and Microsoft). It's not how much money you're making or how big your market share is today, it's which way your numbers are trending and what's happening with its rate of change -- the delta that tells you what tomorrow is going to bring to your business.
I don't have to be Warren Buffett, grandmaster investor, to see that two of what were once the leading proprietary software companies are trending down in a hurry, while, bad economy and all, the open-source companies are actually prospering. Remember this date ladies and gentlemen; I think it's going to prove to be an important one in software and business history.