Microsoft: Open source threatens our business model
IDG News Service - Microsoft Corp. has confirmed that it sees the open-source software movement as a threat to its commercial business model in a quarterly report filed with the U.S. Securities and Exchange Commission (SEC).
The statement, appearing for the second quarter running, amplifies comments by Microsoft Chief Financial Officer John Connors recently about the threat of Linux to Microsoft's server business.
"The popularization of the open-source movement continues to pose a significant challenge to the company's business model," Microsoft wrote in its filing. "[This is] including recent efforts by proponents of the open-source model to convince governments worldwide to mandate the use of open-source software in their purchase and deployment of software products."
Microsoft said it may have to reduce the prices it charges for its products, with a consequent decline in revenue and operating margins, if the open-source movement continues to gain market acceptance.
In the SEC filing, Microsoft contrasted its commercial software development (CSD) model with the open-source movement. The financial investment in software inherent in the CSD model benefits end users, according to Microsoft.
"The company believes that the CSD model has had substantial benefits for users of software, allowing them to rely on the expertise of the company and other software developers that have powerful incentives to develop innovative software that is useful, reliable and compatible with other software and hardware," Microsoft said.
If Microsoft is to vanquish this threat and overcome challenges posed by a weak global economy, it will have to offer users compelling reasons to buy its software, the company said.
"The company's revenues would be unfavorably impacted if customers reduce their purchases of new software products or upgrades to existing products because new product offerings are not perceived as adding significant new functionality or other value to prospective purchasers," Microsoft wrote.
- Silicon Valley's 19 Coolest Places to Work
- Is Windows 8 Development Worth the Trouble?
- 8 Books Every IT Leader Should Read This Year
- 10 Hot Hadoop Startups to Watch
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- CIOs Deliver Productivity Breakthroughs with Intelligent Digital Signage Retailers have long recognized the influence that digital signage provides over a shopper's point-of-purchase decision making process.
- ERP in the Cloud and the Modern Business View IDC's White Paper, to review IDC CloudTrack Survey findings, gain expert insight into the challenges and opportunities the cloud presents, and determine...
- Oracle ERP Cloud Service - Back-Office Solutions that Keep You in Front Learn how you can harness the power of the cloud to run your business more effectively and lower upfront costs.
- Integration with Oracle Fusion Financials Cloud Service While moving your financial system to the cloud may seem straightforward, truly realizing the advantages of the cloud requires a complete understanding how...
- Top 4 Digital Signage Fails Join RMG Networks for a look at four of the most common reasons digital signage fails in corporate businesses. Learn about strategies to...
Transforming Finance, Procurement and Supply Chain Effectiveness with Cross-Functional Analytics
Date: May 6th, 2014
Time: 1 PM EDT
Attend this Webcast to find out how Oracle's packaged analytic applications enable line-of-business managers to examine all...
All Applications White Papers |