In defense of Microsoft

Editor's note: Russ McGuire is the online director of Business Reform Magazine. Each issue of Business Reform features practical advice on operating successfully in business while glorifying God.

For the past month I've been bashing Microsoft. I've accused the company of creating products which are ripe targets for cyber-terrorists. I've blamed the company's marketing efforts for threatening our economy by pushing unreliable systems in places where reliability can't be compromised. And I've even pointed out parallels between Microsoft's plans for the new release of Office and the destructive, ungodly actions of the beast described in the closing book of the Bible. But to be honest, Microsoft has done nothing wrong.

Microsoft is a for-profit corporation. Their goal is to maximize the financial return to their investors. This most predictably happens when the company increases revenue and increases the profit margin on each dollar of revenue. Microsoft is pretty good at this, and their recent actions are consistent with that goal.

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How does Microsoft increase revenues? Microsoft has a bunch of divisions and products. But, in reality, Microsoft's revenues are most strongly driven by three products: Windows on the desktop, server software, and the Office suite.

It is difficult for Microsoft to increase revenues from Windows on the desktop. The company already enjoys such dominant market share that revenue gains must come from more "creative" approaches, such as convincing customers to upgrade to a newer release of the operating system or changing the licensing scheme to generate additional revenues (especially if customers refuse to upgrade on Microsoft's preferred schedule). These actions tend to displease customers, but since most customers are already committed to Windows (with extremely high barriers to exit), the risk of actually losing significant customers/revenue is pretty small compared to the potential revenue gains. Besides, customers have proven to have pretty short memories about Microsoft's strong-arm tactics, so short term pain for Microsoft is okay given the long-term gain.

Server revenues are another story. Although Microsoft has been strongly gaining in the server arena, the company still has significant upside by convincing customers to convert their Unix or Linux server environments over to Microsoft server software. Unfortunately for Microsoft, customers actually do have credible alternatives to Windows Server solutions and many potential buyers are fairly well locked in to these competitive solutions. This reality helps explain some of Microsoft's more bizarre behavior, closely tying a relatively low cost, simple decision product like Office to a much higher cost, complex decision product like Windows Server 2003. In effect, Microsoft is telling its largest customers "if you want to use all the features of Office, you need to commit your server environment to us."

Like Windows, Microsoft Office holds a dominant market position, so revenue growth is tricky. As described in my most recent article, Microsoft is doing all it can to try to "encourage" customers to upgrade to Office 2003 as quickly as possible. In part, this will drive Office revenues. But more importantly, it will lock in those revenues and neutralize the very credible threat being offered by OpenOffice. OpenOffice is a free software suite that provides most of the capabilities included in Microsoft Office and that has been file compatible with Word, Excel, and Powerpoint. To be honest, OpenOffice isn't yet quite up to snuff. I've been using it pretty heavily for over a year. It's been getting better, but it is still not as intuitive to use as the Microsoft equivalents, and I've found it to be a bit less stable than Office itself (and that's a pretty low standard…). But, it is catching up and I believe it is merely a matter of time before OpenOffice will match or exceed Microsoft's capabilities.

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And that must scare Microsoft to death. Which is why I believe the company is working so hard to create artificial lock-in through their new authentication features in Office 2003. If Microsoft can convince enough of their largest customers to upgrade, then those large companies will require their trading partners to upgrade, and so it will flow, downhill all the way to you and me.

Do I remain critical of Microsoft? Absolutely. To help make my point, let me share a few articles that some of you shared with me. Most of these are old articles, underscoring the fact that Microsoft has been aware of these issues for years and has done virtually nothing about them.

Do I believe that Microsoft has ignored the security threats that have been created by their poor design of Windows XP, Outlook, Internet Explorer, and other products? Yes. No question about it. Just read:

• Microsoft Does Not Understand Security: Steve Gibson recounts the response from Microsoft when he tried to point out the security risks built into Windows XP prior to its release. (By the way, anyone at all interested in Windows security should invest a few hours browsing the www.grc.com website.)

Do I believe that Microsoft's unreliable technology has been pushed into places it doesn't belong? You bet I do. Just read:

• Software glitches leave Navy Smart Ship dead in the water

Would I recommend extreme caution when implementing Microsoft's authentication and security capabilities? No doubt about it. Just read:

• New .NET Passport flaws raise security doubts: Microsoft's current authentication system continues to have major problems after two-years of documented failures
• Stealing MS Passport's Wallet: previous flaws exposed customers' financial and personal information

But ?so what? We all make mistakes. I can guarantee you that every product or service that I ever offer will have flaws.

It is up to the marketplace to respond. It is up to customers to say they won't accept this type of behavior from Microsoft, and it is up to competitors to develop alternatives that outperform Windows and Office.

So far, I have seen too little of either. It's hard to overly fault customers when they don't have credible choices, so I most strongly urge the software community to accelerate efforts to develop solutions that can seriously compete with Microsoft products. We desperately need a competitive market for business-class desktop software products.

The only thing worse than a Microsoft monopoly would be a Microsoft monopoly under federal regulatory control. Imagine what would happen to the price of Windows, Office and all other Microsoft products if the company were burdened with constant regulatory oversight. Imagine the opportunity that would be opened to China's accelerating investments in Linux and other "open" source solutions if Microsoft were slowed by regulatory approval processes.

I know – some of you are saying to yourselves that we already have credible competitive alternatives. And on one level, you are correct.

In selecting a desktop operating environment, Apple's products offer a very compelling solution. I strongly recommend that anyone deciding on a desktop platform give serious consideration to the Mac in all its forms. It is true that Apple's products tend to be higher priced than Windows-based comparables, but given the ballooning costs of patching and defending Windows, I would argue that a Mac could easily be the lower cost solution.

However, I'm still waiting for the other alternative desktop to arrive – Linux. True – there are already graphical user interfaces available from Red Hat, SuSE and others that look and act very similar to Microsoft's products. Sun Microsystems has also just announced a new product that they are promoting as an easy Windows replacement. The advantages these solutions have over Apple are that they allow the customer to make a small investment (usually less than $100 per desktop) and convert their existing investment in PC hardware into a platform that is independent of Microsoft's flaws. Unfortunately, the current solutions aren't quite ready for mass adoption.

I've been using Linux and Unix on servers for decades. I even greatly enjoyed the Unix-based Next desktop environment for a couple of years in the early 1990s (and since Next was acquired by Apple and much of this value was integrated into the Mac operating system, you too can enjoy these benefits). However, I recently upgraded one of my Windows-based PCs to the SuSE Linux distribution and I was quite disappointed. The solution meets my needs well. But, unless you are comfortable jumping into a Linux/Unix shell command line mode to install new software or to launch new programs, I'm afraid Linux isn't yet right for you. I would compare the current state of Linux desktop solutions to Windows 3.1. For the most part both Win 3.1 and Linux graphical desktop environments are intuitive, but each still incorporates enough of the command line legacy (DOS for Windows 3.1, Linux/Unix for the open source windowing environments) to unsettle the vast majority of today's Windows users.

I hope and pray that the open source community can leap from Windows 3.1 to Windows 95 levels much more rapidly than Microsoft was able. And more importantly, I hope that leap happens before we, as an economy, get even more locked in to Microsoft's solutions.

Because, in the end, I fear two things. I fear that Microsoft's products are creating more problems than solutions. And I fear that, if the competitive market doesn't step up to challenge Microsoft, the government will. Heaven help us all.

Russ McGuire is Online Director for Business Reform. Prior to joining Business
Reform, Mr. McGuire spent over twenty years in technology industries, performing various roles from writing mission critical software for the nuclear power and defense industries to developing core business strategies in the telecom industry. Mr. McGuire is currently focused on helping businesspeople apply God's eternal truths to their real-world business challenges through Business Reform's online services. He can be reached at [email protected].