Microsoft is struggling. The Internet has proven to be a worthy adversary. The old model that Microsoft used successfully was the upgrade cycle at corporations where software was bundled with hardware and everyone else was forced to upgrade their home computer systems to remain compatible. Since the Internet came along, the upgrade cycle has been extended – bandwidth provided by most Internet connections is trivial for most five or even ten year old computers to handle. Business IT departments have found ways around the prior three year desktop refresh cycle. Apple has been though a resurgence and Linux has become a huge force in the market place. It is difficult for Microsoft to compete against free software produced by evangelical programmers with a purpose greater than making money. So what is Microsoft (MS) to do?

1. Embrace Linux – Microsoft has threatened Linux coders with patent infringements (real or imagined) and has tried to negotiate agreements with a few of the larger Linux providers (and had only about a 50% success rate). Apple computer went out and purchased a version of Linux and then added some new graphics and features. Think about how to join the Linux revolution and make a better world. MS might consider starting with contributions to WINE to improve future use of legacy software.
2. Create a core around graphics and gaming. The overwhelming reason for anyone to profess keeping a computer around with MS Windows instead of 100% Linux is the games. More game programmers code for Windows than Linux (though that is changing). MS can choose to expand the niche they are already in (remember they make XBOXs for TV gaming) by going into Linux. Use the Adobe model – give away the viewer and charge for the writer software. Given the headway that Ubuntu / Debian Linux have I would suggest starting with solutions there.
3. Improve Linux. That’s right – improve Linux and open source it too. Many programmers are out there coding day and night against what they see is a common enemy. Remove the enemy and much of the free programming will disappear. MS as a company will have to play nice and be a great corporate contributor to the open source space for any benefit to be received.  Great corporate contributor.  Repeat.
4. Take back servers. Who wouldn’t believe MS support for Linux server software?

5. Reintegrate with Dell and others. So many consumers are demanding alternatives to MS Windows that Dell recently started offering Ubuntu Linux on many server, desktop, and laptop computers.

6. Force hardware driver improvements and availability. All the hardware vendors must support MS Windows if they want to sell anything – what if that same zeal were pushed into Linux? It’s been a competitive advantage for MS but that is quickly eroding as hardware vendors see the number of products running under Linux steadily increase.
7. Outsource coding. With the underlying structure of Linux (and security benefits etc built-in) the ability to manage ad-hoc teams of professional programmers is a key strength MS has. MS can work on improving the ease of use and consistency of the interface (think Apple).
8. Understand that MS will be smaller but more profitable. There will be a free open source version and then a more feature-full premium version. A few large Linux distributions are on a six month refresh cycle – where Windows seems to be on a five year refresh – isn’t that dangerous for Windows?
9. Start an open source community or begin to work with one of the larger existing communities – or do both and cross-link with web sites.

10. Project Management. MS has hundreds of project managers currently working on existing programs. Redirect the focus and efforts to the Linux and open source projects and soon MS will have made a transition into a new business model.

Microsoft needs to transform itself or it will perish. There is a small Window of opportunity and it shouldn’t be missed. Or MS can continue spending all its time chasing “Pirates!” and walling itself off with “Genuine Advantage” and end up as a small footnote in Wikipedia. What is the choice? Are you in or are you out?
Cheers!