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For years, Bill Gates and other top executives at Microsoft railed against the economic philosophy of open-source software with Orwellian fervor, denouncing its communal licensing as a "cancer" that stifled technological innovation.
Today, Microsoft claims to "love" the open-source concept, by which software code is made public to encourage improvement and development by outside programmers. Gates himself says Microsoft will gladly disclose its crown jewels--the coveted code behind the Windows operating system--to select customers.
"We can be open source. We love the concept of shared source," said Bill Veghte, vice president of the Windows Server Group. "That's a super-important shift for us in terms of code access."
Did Microsoft suddenly find open-source religion? Hardly. It was dragged there kicking and screaming by its customers, who are increasingly drawn to open-source software like Linux, whose inner workings of code can be seen by anyone and modified.
While small in scope, Microsoft's adoption of some key open-source tenets is monumental in meaning. It is an acknowledgement that the company sees the technology as its most serious competitor in years and is taking steps to make sure its Windows franchise can survive the attack.
The open-source movement also represents a larger threat to Microsoft that transcends any particular technology or company: The high-tech industry has undergone a psychological shift that encourages challenges to Microsoft, which for many years had been technologically possible but practically unthinkable.
For a combination of reasons ranging from the troubled economy to mistakes in Microsoft business strategies, many large companies are wondering, for the first time in maybe a decade, why they pay so much for its products and how they can get by with less.
"This is going to force Microsoft to look at how they structure their software architecturally, and how they package and market their products, and I think that's good," said Michael Cherry, an analyst with Directions on Microsoft.
Microsoft has itself to blame at least in part for strengthening the hand of its rivals. A controversial new software licensing policy, which raises prices for some customers and asks them to pay in advance for future releases, has angered many Microsoft customers and driven them to seek cheaper alternatives such as Linux.
While no one expects the open-source trend to affect Microsoft's profits immediately--the company is still ringing up record sales and has roughly $40 billion in cash--it is clear that the technology's popularity has forced the company to respond.
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