Jim Grey: How can Microsoft make money against Open Source?

Jim Grey is a brilliant computer scientist, but he’s not a businessman. On a software conference panel, he suggested that Open Source would destroy the American software industry. Nonsense. It might destroy Microsoft, unless they change their direction, but not the industry. The industry needs to stop selling proprietary products and start selling support for those products. Support is what people *think* they are buying, anyway. PHBs buy BigBlue because “there’s one neck to strangle.” (Newsflash: there is no neck.) Consumers buy Microsoft because they think they can get support from their friends. As their friends master Ximian and Safari and Mozilla and Evolution and Rekall and more, the tides will shift.

Most software companies don’t make money selling software. They make money by helping companies solve business problems through the use of computer technology and software. It is that knowledge – how to solve business problems – that is the value-add, not the ones and zeroes on disk. People will pay for solutions to their problems, for training on how to do it, for support on how to fix it when it isn’t working right. We don’t pay an electrician an annual licensing fee to have electricity flow through the office. We pay a supplier for the energy we consume, and an electrician for maintenance and repairs.

Microsoft exec: Open source model endangers software economy. SANTA CLARA, Calif. — A Microsoft official Monday questioned how the software industry could survive if users are getting software for free through open source. [InfoWorld: Top News]

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