Value of Free (and Passion)

One of the most significant changes the social software has enabled is the ability for people to find and connect with other people who share their passions. Not only are we able to meet and build relationships across the boundaries of time and space, but we are also able to collaborate on projects and develop new products.

By enabling people to find and connect with others and collaborate in spite of time or geographic boundaries, the social web has, in a way, giving us more free time to explore our creativity and our passions. We have seen an explosion of new ideas and new products online, many are simply artistic expressions, others are tools developed because they were the types of tools the developers wanted to use, and few have been developed with the purpose of making money.

The ability for people to develop tools that they want to use or to connect with others to enhance their skills and work on their Art has been drastically shaking up the business world, not just recently, but since the web first connected people of like minds.

Chris Anderson, the author of The Long Tail, also wrote a great book called Free where he shares several case studies about how Free has shaken up traditional revenue models.

I am particularly intrigued by the Ego of Microsoft when it came to them trying to shrug of Linux.

From Free – page 106- 107
Where had Microsoft been for Linux’s first decade? Mostly hoping that the free operating system would go away or remain insignificant, like most other free software had to date. Even if it didn’t disappear completely, Microsoft executives hoped the appeal of Linux would be mostly to people who already used UNIX, rather than Microsoft’s own operating systems. That wasn’t entirely reassuring – those UNIX customers were a market Microsoft wanted, too – but it was better than direct competition. But more than anything else, Microsoft managers were confused by why any customer would want free software and all the headaches that came with products not polished to a professional sheen.

But the customers did, especially as they built larger and larger data centers to run the fast-growing Web. Maintaining one Linux server might be harder than its equivalent Microsoft counterpart, but if you’re going to deploy hundreds or thousands, learning the quirks of Linux once could save a huge amount of money down the road. By 2003, Linux’s share of the Web server market had grown closer to one-third. One way to stem the tide would have been to match the Linux price: zero. But that was simply too scary to contemplate. Instead, Microsoft mostly sniped from the sidelines.

Within the company, some engineers were already warning that Linux represented a ling-term competitive threat to Microsoft’s core business model and arguing that the company had to mount a more credible response. In 1998, one programmer circulated a memo describing open source software as a “direct revenue and platform threat to Microsoft.” The document, which was leaked and circulated as the “Halloween memo”, goes on to warn that the “free idea exchange in OSS has benefits that are not replicable with our current licensing model and therefore present a long term developer mindshare threat.”

But in public, Microsoft was taking a very different stance. One news report from December 1998 goes like this: “Microsoft executives dismiss open-source as hype: “Complex future projects (will) require big teams and big capital,” said Ed Muth, a Microsoft group marketing manager. “These are things that Robin Hood and his merry band in Sherwood Forest aren’t well attuned to do.”

I, personally believe that Microsoft has and will continue to lose market share because of their arrogance and Ego when it comes to competitive threats. Dysfunctional egos do not allow people to see when they are not as good as the next guy. Dysfunctional egos that come with success give people the illusion of entitlement. Ultimately, a dysfunctional ego causes people to get blindsided.