Is Microsoft turning over a new leaf?

This time, the company's talk of increased openness has some substance behind it, with APIs for the latest versions of popular apps for the first time

Is this a new Microsoft?

The increased commitment to opening up its APIs and supporting more industry standards is a real shift at Microsoft, O'Kelly said -- but one that has been happening behind the scenes at Microsoft for the last two years. Eric Newcomer, CTO at Iona Technologies, which develops messaging interoperability tools, has seen this shift occur as well. "I've seen more commitment to interoperability at Microsoft in the last 18 months than I have in 10 years of working with Microsoft," he said.

"This is a dramatic change from 20 years ago, but not so dramatic a shift for the last two years," O'Kelly said. "I don't think it's lip service," noting that once the APIs are put into the public domain or given over to standards groups, "they can't be taken back."

He ascribes Microsoft's change to three related factors.

One factor is a shift in leadership, with Ray Ozzie being made the company's chief software architect the most notable example of more than a dozen high-level executive changes in the last few years. "A lot of this is Ray," O'Kelly said, based on Ozzie's long-held beliefs in open standards and competing through quality and innovation rather than through setting up barriers. But the support goes all the way to the top: "[CEO Steve] Ballmer has given him a charter." Forrester Research analyst Mike Gilpin also credits Bill Hilf, general manager of platform strategy and a former IBM Linux specialist, as a leader of this change in approach.

O'Kelly cites the improvements in SharePoint 2007, the radical change in Windows Vista's UI, and the creation of a server-based version of Excel as evidence -- no matter what one thinks of the specific results -- that Microsoft is in fact focused on competing through innovation rather than by circling the wagons.

The second factor is that the industry has changed, and Microsoft has had to change with it. Perhaps the biggest shift is that technologies today are fairly mature and established, so it's less and less likely that new products or versions of existing products can dislodge others. "Companies now stay with what they have: Windows, mainframes, and Java," said Iona's Newcomer.

And customers are less likely to replace software wholesale, instead preferring modular updates, Newcomer said, citing a shift in the Java world away from big server stacks to modules. He suspects a similar shift in customer upgrade behavior in the slow adoption of Windows Vista.

The third factor is that it now is costing Microsoft more to be proprietary than to be open, said O'Kelly. "There's an opportunity cost to not adhering to the spirit and letter of following the [European top court's ruling against Microsoft], and that cost is infinite," he noted, since the Europeans show no inclination to back down. The protracted fight and the Microsoft policies that led to it also make many customers question a continued commitment to Microsoft, or at least take a wait-and-see attitude to further investments.

Calling Microsoft's announcement "very positive," Ovum analyst Lachal, also noted it was a belated reaction to the cost imposed by Europe's fight over competition concerns: "Microsoft has had plenty of opportunities to realize that it is in its long-term interests to dive into the interoperability pond rather being forced repeatedly to dip its toes in it." And he suggested that Microsoft must be carefully monitored to ensure it doesn't retreat from its commitment.

These market changes mean that Microsoft has to act as part of a greater ecosystem, not try to replace everything else on the market. "It's no longer the Mike Maples 'our natural market share is 100 percent' mentality," said Burton Group's O'Kelly, referring to Microsoft's former executive vice president for worldwide products.

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