Wednesday, March 17, 2004


posted by Michael Piwonka 8:40 PM
Here is an example of what the future holds in the IT industry. With the ever-increasing adoption worldwide of open source software such as Linux, Microsoft's future seems to depend more upon attempting to maintain monopoly position through US courts. (Unfortunately, this won't help them in the rest of the world.)

Not that Microsoft has ever been known for incredible innovation, the company did at least help standardize most PC software, albeit at the expense of competitors like Netscape. Now, however, squashing open source through monopoly power is proving to be more difficult. So Microsoft appears to have decided that the courts are a good way to maintain market share.

While their subsizing of the SCO lawsuit against IBM (and others, including their own customers) caused a minor ripple in the IT world, it has now been exposed as a weak attempt at creating uncertainty. But I'm sure Microsoft won't stop with this single legal venture, although all future attacks on open source will be harder to disguise.

On a related note, I'm still kicking myself for not shorting the SCO stock when the lawsuit first came out. Their stock shot up from ~$1 to over $20 when the news broke because, I suppose, Wall Street can't help but bet on the chance for an incredible payday in court. Only a few months later, the stock is below $9 and continuing to drop (I've read recent predictions that the stock would level off in the $8 range).

When the folly of the lawsuit was exposed, SCO's stock price didn't immediately fall, as Wall Street and non-IT media didn't understand the technical aspects of the case. I was surprised to see the stock maintaining its inflated price, but was too risk-averse to short the stock.

Oh well, you live and you learn. But I can depend upon Microsoft to stage another such lawsuit(s) on Linux in the future, so I need to pay attention and act quickly next time should similar circumstances arise.


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