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bullied everyone else。 Partly it is because they believe that open…source software
can be kept more fresh and bugfree than any commercial software； because of the way
it is constantly updated by an army of unpaid programmers。 And partly it is because
some big tech companies are paying engineers to work on Linux and other software；
hoping it will cut into Microsoft's market share and make it a weaker competitor all
around。 There are a lot of motives at work here； and not all of them altruistic。 When
you put them all together； though； they make for a very powerful movement that will
continue to present a major challenge to the whole commercial software model of buying
a program and then downloading its fixes and buying its updates。
Until now； the Linux operating system was the best…known success among open…source
free software projects challenging Microsoft。 But Linux is largely used by big
corporate data centers； not individuals。 However； in November 2004； the Mozilla
Foundation； a nonprofit group supporting open…source software； released Firefox； a
free Web browser that New York Times technology writer Randall Stross （December 19；
2004） described as very fast and filled with features that Microsoft's Internet
Explorer lacks。 Firefox 1。0； which is easily installed； was released on November 9。
〃Just over a month later；〃 Stross reported； 〃the foundation celebrated a remarkable
milestone： 10 million downloads。〃 Donations from Firefox's appreciative fans paid
for a two…page advertisement in The New York Times。 〃With Firefox；〃 Stross added；
〃open…source software moves from back…office obscurity to your home； and to your
parents'； too。 （Your children in college are already using it。） It is polished； as
easy to use as Internet Explorer and； most compelling； much better defended against
viruses； worms and snoops。 Microsoft has always viewed Internet Explorer's tight
integration with Windows to be an attractive feature。 That； however； was before
security became the unmet need of the day。 Firefox sits lightly on top of Windows；
in a separation from the underlying operating system that the Mozilla Foundation's
president； Mitchell Baker； calls a 'natural defense。' For the first time； Internet
Explorer has been losing market share。 According to a worldwide survey conducted in
late November by OneStat。com； a company in Amsterdam that analyzes the Web； Internet
Explorer's share dropped to less than 89 percent； 5 percentage points less than in
May。 Firefox now has almost 5 percent of the market； and it is growing。〃
It will come as nosurprise that Microsoft officials are not believers inthe viability
or virtues of the free software form of open…source。 Of all the issues I dealt with
in this book； none evoked more passion from proponents and opponents than open…source。
After spending time with the open…source community； I wanted to hear what Microsoft
had to say； since this is going to be an important debate that will determine just
how much of a flattener open…source becomes。
Microsoft's first point is； How do you push innovation forward if everyone is working
for free and giving away their work？ Yes； says Microsoft； it all sounds nice and chummy
that we all just get together online and write free software by the people and for
the people。 But if innovators are not going to be rewarded for their innovations；
the incentive for path…breaking innovation will dry up and so will the money for the
really deep R & D that is required to drive progress in this increasingly complex
field。 The fact that Microsoft created the standard PC operating system that won out
in the marketplace； it argues； produced the bankroll that allowed Microsoft to spend
billions of dollars on R & D to develop Microsoft Office； a whole suite of applications
that it can now sell for a little over 100。
〃Microsoft would admit that there are number of aspects of the open…source movement
that are intriguing； particularly around the scale； community collaboration； and
communication aspects；〃 said Craig Mundie； the Microsoft chief technology officer。
〃But we fundamentally believe in a commercial software industry； and some variants
of the open…source model attack the economic model that allows companies to build
businesses in software。 The virtuous cycle of innovation； reward； reinvestment； and
more innovation is what has driven all big breakthroughs in our industry。 The software
business as we have known it is a scale economic busi…
ness。 You spend a ton of money up front to develop a software product； and then the
marginal cost of producing each one is very small； but if you sell a lot of them；
you make back your investment and then plow profits back into developing the next
generation。 But when you insist that you cannot charge for software； you can only
give it away； you take the software business away from being a scale economic
business。〃
Added Bill Gates； 〃You need capitalism ＇to drive innovation。＇ To have ＇a movement＇
that says innovation does not deserve an economic reward is contrary to where the
world is going。 When I talk to the Chinese； they dream of starting a company。 They
are not thinking； 'I will be a barber during the day and do free software at night。'。 。 。
When you have a security crisis in your ＇software＇ system； you don't want to say；
'Where is the guy at the barbershop？'〃
As wemove into this flat world； and you have this massive Web…enabled global workforce；
with all these collaborative tools；there will be no project too small for some members
of this workforce to take on； or copy； or modify…for free。 Someone out there will
be trying to produce the free versions of every kind of software or drug or music。
〃So how will products retain their value？〃 asked Mundie。 〃And if companies cannot
derive fair value from their products； will innovation move forward in this area；
or others； at the speed that it could or should？〃 Can we always count on a
self…organizing open…source movement to come together to drive things forward for
free？
It seems to me that we are too early in the history of the flattening of the world
to answer these questions。 But they will need answers； and not just for Microsoft。
So far…and maybe this is part of the long…term answer…Microsoft has been able to count
on the fact that the only thing more expensive than commercial software is free
software。 Few big companies can simply download Linux off the Web and expect it to
work for all their tasks。 A lot of design and systems engineering needs to go around
it and on top of it to tailor it to a company's specific needs； especially for
sophisticated； large…scale； mission…critical operations。 So when you add up all the
costs of adapting the Linux operating system to the needs of your company and its
specific hardware platform and applica102
tions； Microsoft argues； it can end up costing as much as or more than Windows。
The second issue Microsoft raises about this whole open…source movement has to do
with how we keep track of who owns which piece of any innovation in a flat world；
where some is generated for free and oth