Q&A: Will Yahoo Deal Force Microsoft To Abandon 'Windows Everywhere'?
Six days later, tremors are still being felt from Microsoft's
$44.6
billion bid to acquire Yahoo. And with good reason. The deal would certainly
change the way Microsoft moves forward with its perpetual "Windows Everywhere"
strategy, because it would force the company to deal with a raft of Web-based,
open source technologies. After a decade of trying to discredit open source,
Redmond might find itself in the ironic position of having to give equal weight
to Windows and open source.
I spoke with Dana Gardner, president and principal analyst of Gilford, N.H.-based
Interarbor Solutions Inc. in about the proposed deal. He had some interesting
things to say.
Redmondmag.com: How does Microsoft reconcile its undying commitment to
Windows with the acquisition of a major company that has a strong open source-oriented
development culture?
Gardner: Not sure they can. If this deal goes through, Microsoft
becomes the owner of one of the largest distributed open source data center
complexes in the world. This is unbelievable irony. [What] they are saying to
large enterprises is, "Our way to win on the Web is to go open source and
we liked it so much we bought the company." They instantly become an open
source company. No two ways about it. For them to try and shoehorn the Yahoo
data center infrastructure into a Windows environment is the equivalent of swapping
the Atlantic and Pacific oceans.
What's the potential impact of Zimbra's open source collaboration tools
as part of this deal?
The Zimbra acquisition [by Yahoo last
September] shows the importance of rich client vs. fat client approaches
to business services such as communications, e-mail and collaboration. Yahoo,
being a Web company, is interested in reaching out toward the rich clients with
AJAX enablement. Microsoft is coming from the fat client side but moving toward
the rich client side with Silverlight and other initiatives. Zimbra sits in
the middle between the Yahoo heritage and the Microsoft heritage. It could be
an interesting way for Microsoft to enter more rich application activities.
How do you see their corporate cultures meshing?
Yahoo is very much a Silicon Valley company that is of, for and by the
Web. Microsoft engineering is very centralized up there in Redmond, 850 miles
away. Microsoft seems to think it will get a lot of engineering talent form
this, but as we have seen with other big acquisitions, the talent has walked.
So there is significant risk. Anyway, I think Microsoft is more buying the audience
than it is the employees. Remember that Yahoo is much more a media company and
Microsoft is an engineering and software company, which is where their corporate
cultures are most at odds. I guess you need to be both these days to succeed.
But one monetizes around advertising and media and the other around licensing
software. It is more a case of a dissonance of business models than it is one
of culture.
Google Continues Toward the Cloud
With Microsoft and Yahoo grabbing all the headlines this week with its proposed
merger, Google today gave the would-be combined company something to think about
in terms of online applications. The company announced Google
Apps Team Edition, which officials say will allow users to insert a hosted
applications service right smack in the middle of an enterprise.
The offering is meant to tempt corporate users away from the dark (their comfortable
and traditional Microsoft-based desktop applications) and toward the light (the
sort of free Web-based applications Google and others are promoting).
The point here is Google is pushing the idea (and hopefully the popularity)
of cloud computing -- an idea that Microsoft says it's grabbed onto but has
been slow to actually execute. The proposed Yahoo acquisition, of course, would
help Microsoft get there faster. But with today's announcement, Google made
clear that it isn't exactly waiting around for Jerry Yang to answer Steve Ballmer
about whether he wants to play on the Redmond team.
The new Team Edition essentially is a service that allows corporate users to
work more easily with Google Apps. It's an integrated suite of products made
up of the company's Docs, Calendar and Talk applications. Company officials
said that just about any user can open an account and use the new suite to access
shared documents over the Internet.
Big Blue Sheds Some Light on Cognos
Investment
Last November, when IBM plunked down $5 billion for Cognos, Big Blue officials
said it did so because the Ottawa-based company's technology was a good fit
with its overarching Information on Demand strategy.
Well, yesterday in New York, Steve Mills, IBM's senior vice president and group
executive of the Software Group, laid
out more precisely how Cognos technologies would contribute.
First was a series of 10 new IBM-Cognos solutions for vertical markets, including
some IBM favorites like banking and a number of manufacturing industries. Second
was the roll-out of six other offerings that include "pre-integrated"
IBM-Cognos-flavored products that can help business managers in IT shops use
business intelligence more smartly. The goal of all of this is to provide the
ability to deliver the right information to people when they need it and, to
boot, give them the sort of business insights that result in a competitive advantage.
OK, sounds pretty good (if not a little dry) -- but is this going to be worth
the $5 billion investment? Mills thinks so. He said the Cognos products all
fit neatly into the "business optimization" IT market, which he expects
to be worth about $117 billion in 2008. This market takes in products that deal
with managing and presenting information as opposed to automating business processes.
The Cognos products will be used as the glue that ties together IBM's entire
portfolio of business applications and tools, a core advantage of its Information
on Demand strategy launched almost two years ago to the day.
Mailbag: Thoughts on Microsoft's
Yahoo Play, More
Here are some more
of your opinions -- mostly negative -- on Microsoft's $44 billion bid for
Yahoo:
I must be missing something. I cannot see the value in Yahoo for Microsoft,
much less borrowing the money to buy it. Couldn't MS create it's own Yahoo
equivalent in-house for much less?
-George
In my opinion, many of Yahoo's customers will move to other services if
Microsoft buys Yahoo. In the end, Microsoft would have payed way too much
for the company.
Take Zimbra, for example. How will Microsoft integrate Zimbra customers
into Exchange? Many of them ran from Exchange to Zimbra.
-Demola
What do I think of Microsoft's bid to take over Yahoo? The only surprise
here is how generous the offer is. I think the bid amount is about $40 billion
too much. I just don't see the value there. Microsoft could have hired some
outside talent to develop a new system to compete with Google for a fraction
of that. That bid seems to indicate some urgency on Microsoft's part. It apparently
needs to take Google down ASAP and doesn't care what it costs. That is the
real issue here.
I don't think Microsoft cares about the services that Google offers or
competing in the search engine/advertizing business. Its concerns are the
size and growth rate of the competition and the competition's profit margin.
As long as Google continues to grow and have great success doing what Microsoft
has failed to do, which is innovate, Microsoft will see it as a threat to
its dominance in the software and services market. That means that Microsoft
must squash Google ASAP.
Frankly, I don't give a rat's tail about Microsoft taking over Yahoo
and I don't think Micro-hoo will be able to close the gap with Google. We're
at the point, finally, where we don't depend on any single software giant.
-Gary
It seems that MS is up to its old tricks of trying to buy innovation,
rather than cultivate it.
-Steven
The Microsoft-Yahoo deal is NOT the same as two petroleum companies merging.
It is a whole different beast. Microsoft runs on the Windows platform which
has proven inadequate to run big Internet companies. There is not ONE big
Internet company -- and I mean BIG, like Google, Yahoo, Amazon, eBay and so
on -- that runs on Windows besides Microsoft. Microsoft's software platform
has been a disaster supporting their search engine, e-mail and other free
business services. They are being beaten by Google and Yahoo on that, who
run on open source software which has been shown to be much more efficient
then Windows servers.
Now here comes the big issue: Will Microsoft move Yahoo to Windows? If
so, they will go broke, because this is just what has not worked well. If
they do not, they will be writing up the Windows platform obituary, because
when people realize that Microsoft itself can run on Linux and does not need
Windows, they will follow through. To my knowledge, the simple fact that Microsoft
is bidding to buy Yahoo means that Microsoft has thrown in the towel on the
OS platform, and that the Windows platform is a thing of the past.
-Marcelo
Bruce shares his take on the ongoing chip wars, which got a little more complicated
after Intel's announcement of its new
Tukwila chip yesterday:
What I think got lost in all of the chip wars is the fact that availability
depends a lot more on the OS than the chips. I can't remember the last time
a server crashed due to a chip hardware failure. But I can easily remember
the last time an OS got toasted by overuse (a few days ago). If I had a single-chip,
single-box system that I needed up and running and not die, it would be Linux,
hands down. In other words, take out the system redundancy and make it totally
dependent on the OS to keep on running, and then throw a whole bunch of crap
at it and see if the OS dies.
Here's my take: I bet any version of Windows craps out before Linux.
I see it here all the time -- same app, different OS, same story. I'm not
talking about bots taking it down, or anything like that. What I'm talking
about is a bunch of developers beating on a server, working overtime and over-taxing
a dev box which are often single-chip things. Am I just lucky in picking apps
that crash Windows or am I seeing the same thing everyone else does?
-Bruce
Lafe reported yesterday on yet another new
botnet detected by BitDefender researchers, and asked readers what they
do to protect their systems. For one reader, it's simple:
Get a mac. It's true. That is what I did.
-Anonymous
Finally, Doug recently checked out Microsoft's "HEROES happen {here}"
comic strip -- and was
stumped. Turns out he's not the only one:
Am I not laughing because I too do not know what an "etagere"
is? Would Dennis Miller get it? I doubt it. I'll take www.routergod.com
(the IT version of the Onion) any day.
-John
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About the Author
Ed Scannell is the editor of Redmond magazine.