I could write a book, or at least a HBR feature, on how Microsoft has both fallen victim to, and has exploited Misner’s Law of Open Source Competition, and it would be a page turner. I think what’s especially interesting is that with some of the same products, Microsoft has been a victor and a victim at separate times.
Let’s look at the browser wars, for example. Netscape was driven out of the marketplace by Microsoft giving away IE for free. Now, it’s the Netscape dervived open source Mozilla which is serving as the alternative for IE.
The MS OS’s have had a lot of competition from Linux, but they’ve also integrated BSD code into their networking stacks.
They’ve tried to lock customers in with proprietory formats, tried offering stripped down versions of Windows and Office in third party countries, and have tried to maintain relevance by adding features. (All possible strategies for dealing with Misner’s law.) Meanwhile, Office now has an 80% as good competitor with Open Office.
Microsoft has also tried to keep relevant by adding features bought through acquisitions, and integrating ideas from other companies in IT. By levaraging these features with their existing products, they hope to keep the value delta where it should be.
It’s going to be interesting watching Microsoft try to advance in light of the hard road they face because of Misner’s Theory.