Now the software giant faces a different challenge: fending off open-source alternatives that are good enough for most jobs.

At Microsoft's TechEd customer conference last week, executives spelled out the company's lineup to combat these cut-rate incursions onto its turf.

In particular, the company is focused on improving its alternatives to the so-called LAMP stack, the combination of the Linux operating system, Apache Web server, MySQL database, and scripting languages PHP, Perl or Python.

Microsoft's anti-LAMP strategy is to heap features into its low-end products and to build a comprehensive set of tools--spanning development to management--in the hopes of making Windows Server more attractive.

Because open-source products can, in general, be downloaded for free, Microsoft has to compete against them by drawing attention to the "total cost of ownership." It must make the case that, all things considered, Windows applications are cheaper over the long term.

Open source "is the first competitor we've ever had where our cost of acquisition is higher than their cost of acquisition," said Microsoft CEO Steve Ballmer. "Usually, we're able to come in and say, 'We're cheaper and better'...Here we have to say, 'lower total cost of ownership--and better.'"

The LAMP combination--or ones like it--have been around for many years. But as LAMP becomes more popular, it poses a more comprehensive threat to Microsoft than Linux alone, because the LAMP package includes a development environment and database.

Microsoft executives have long been aware of how developers are using the LAMP stack, but in the past few months the company has shown a more organized response.

In his keynote speech at TechEd, Ballmer cited LAMP as a competitor to Windows and its .Net development software and touted Microsoft's ability to fend off LAMP for "lightweight Web app development."

Stacking up against LAMP

In November, Microsoft will release Visual Studio 2005, which will include a new edition called Visual Web Developer Express designed specifically for relatively small-scale Web development, where LAMP is often used.

At the same time, Microsoft will release two low-end versions of its SQL Server 2005 database, including a free Express edition. The Workgroup Edition of SQL Server, meanwhile, will include business-intelligence software for generating business reports--typically a costly add-on.

To attack Linux and the Apache Web server in its stronghold among Web hosters, Microsoft next year will release an edition of its Internet Information Server (IIS), Web server software that mimics many of Apache's features.

Enhancements to Windows Server are being designed specifically to tackle the places where Linux is strongest, notably for Web development, security servers and high-performance computing, said Bob Muglia, senior vice president in charge of Windows Server development.

Meanwhile, Microsoft is pursuing a multiyear plan called Common Engineering Criteria to create common administrative tools for its server application line, from Windows Server to SQL Server.

Having products that are engineered to work together--something open-source competitors cannot do--will ultimately make Microsoft products easier to run and more cost-effective over time, said Paul Flessner, senior vice president of server applications.

"You can compete with an acquisition price of zero if, over the lifetime, you have a lower total cost of ownership. I think it will be very difficult for them to emulate, honestly, given their economic models," Flessner said. "I feel good about the low-end assault from freeware."

Competing stacks

Historically, Microsoft took on the business market via the low end. Microsoft's server products were used for relatively simple applications, which gave the company a toehold in large corporations and significant presence among small- and medium-size businesses.

The LAMP stack, meanwhile, has found a lot of popularity on the Internet, particularly among Web hosters.

But the LAMP combination is increasingly being used in mainstream corporate software development--competing more directly against Windows and .Net, according to analysts and industry executives.

"The LAMP stack is definitely taking market share from Microsoft," said Doron Gerstel, CEO of Zend Technologies, which sells PHP development tools.

Gerstel acknowledges that Microsoft has strong development tools that are in a "league of their own," but tooling for LAMP is improving quickly through the efforts of companies such as Zend and the work of open-source communities.

The LAMP combination also gives corporate customers more choice among vendors rather than going only with Microsoft. "More and more enterprises are going with the best-of-breed stack," Gerstel said. "Lock-in is a very important element."

Microsoft alternatives to LAMP are good, particularly in regard to development tools, said Greg DeMichillie, an analyst at Directions on Microsoft.

But even with Microsoft's strong tooling and its long-term commitment to better Windows management, the selection of operating system--Linux versus Windows Server--will heavily influence the choice between competing development stacks.

"For Microsoft, the primary lead in the sale has always been the (Windows) platform," DeMichillie said. "The second is how easy they make it to develop for the platform."

By Martin LaMonica, CNET News.com
Published on ZDNet News: June 15, 2005, 4:00 AM PT

And that's not all: Microsoft's Bill Gates and Steve Ballmer also tried to get Sun to license Microsoft Office patents for use in OpenOffice, a move that would have made open-source distribution of the competing product impossible, Jonathan Schwartz said in a blog post Tuesday.

The anecdotes will be of interest at handset maker HTC, which Apple sued last week for patent infringement. HTC, though, is a newer and smaller company that some believe lack the intellectual property arsenal possessed by companies such as Sun.

Jobs delivered his threat to Sun personally, Schwartz said, calling his office to say the graphics in Sun's operating system 3D interface, Project Looking Glass, were "stepping all over Apple's IP," and that if Sun commercialized it, "I'll just sue you."

The meeting with Microsoft followed the same pattern.

"As we sat down in our Menlo Park conference room, Bill skipped the small talk, and went straight to the point, 'Microsoft owns the office productivity market, and our patents read all over OpenOffice,'" Schwartz wrote. "Bill was delivering a slightly more sophisticated variant of the threat Steve had made, but he had a different solution in mind. 'We're happy to get you under license.' That was code for 'We'll go away if you pay us a royalty for every download'--the digital version of a protection racket."

In both cases, Sun countered with its own patent portfolio.

With Apple, Schwartz raised the similarities between Apple's Keynote presentation software and Concurrence, software from Schwartz's start-up Lighthouse Design, which Sun acquired. And he pointed to Sun's operating system patents, relevant given its Unix history and the fact that Apple's Mac OS X uses Unix technology. "Steve was silent," Schwartz said.

With Microsoft, Sun's rebuttal involved Microsoft's .Net programming foundation and Sun's earlier Java. "Microsoft is no stranger to imitating successful products, then leveraging their distribution power to eliminate a competitive threat... So when they created their Web application platform, .Net, it was obvious their designers had been staring at Java -which was exactly my retort. 'We've looked at .Net, and you're trampling all over a huge number of Java patents. So what will you pay us for every copy of Windows?'" Schwartz said. "It was a short meeting."

Microsoft did make some headway, though, in its effort to capitalize on open-source software and its own intellectual property. It alleged in 2007 that Linux and other open-source software projects violate 235 Microsoft patents, and it has signed several patent agreements with companies for related technology.

Schwartz agrees with those who see Apple's suit against HTC as something of a proxy war against Google, whose Android operating system is used in several HTC phones, most notably the higher-end Nexus One. "I feel for Google -Steve Jobs threatened to sue me, too," Schwartz said in the opening line of his blog post.

Schwartz's company was able to defend itself, and indeed ultimately Sun used its patent portfolio to extract a lot of money from Microsoft. "I understand the value of patents -offensively and, more importantly, for defensive purposes. Sun had a treasure trove of some of the internet's most valuable patents--ranging from search to microelectronics -so no one in the technology industry could come after us without fearing an expensive counter assault. And there's no defense like an obvious offense."

HTC may be a little guy, but he suggested Apple's attack may backfire.

"For a technology company, going on offense with software patents seems like an act of desperation, relying on the courts instead of the marketplace," Schwartz said. "I wonder who will be first to claim Apple's iPad is stepping on their IP?"

By Stephen Shankland
Published on cnet news: March 10, 2010 12:25 AM PST