At the intersection of technology, finance and the Pacific Rim.

Wednesday, November 08, 2006

Divide and Conquer

Noam Chomsky, the noted linguistics professor from MIT and social critic (his views are quite radical (in the left-wing sense) from the normal range of the "US viewpoint" (if there is such a thing) had this to say in an interview:

Talk about the divide-and rule policy of the British Raj, playing off Hindus against Muslims.

(Choamsky) You see the results of that today. Naturally, any conqueror is going to play one group against another. For example, I think about 90% of the forces that the British used to control India were Indians.

There's that astonishing statistic that at the height of British power in India, they never had more than 150,000 people there.

(Choamsky) That was true everywhere. It was true when the American forces conquered the Philippines, killing a couple hundred thousand people. They were being helped by Philippine tribes, exploiting conflicts among local groups. There were plenty who were going to side with the conquerors.

Well Microsoft as well has been called the "Evil Empire" for the way it dominates the IT software world. And it has used the above tactic with the skill of the best imperialist--taking a software standard that represented a threat and dividing and conquering. This happened with Java and Sun at the beginning of this decade. A hot middleware software, Java promised the utopian vision of running the same application over numerous different hardware devices and operating systems. At the time, Java was seen as a potential "threat" to the MSFT franchise and hardly anyone would argue that now. Microsoft chipped away, creating their own version of Java and finally making it official by "collaborating" with a weakened Sun. Now there is very little, if any, talk of the threat of Java.

So it should have been no surprise that Microsoft has done the same with Linux, that open source standard "of the people, by the people and for the people". Microsoft announced last week a deal with Novell, the weaker of the two publicly listed, independent "open source" Linux based vendors. The other independent provider, Red Hat, was bombed as well late last month by Oracle--where they essentially agreed to provide support for Red Hat based Linux products at rates substantially cheaper than Red Hat. Bombing is the right metaphor as Larry Ellison, the founder and Chairman of Oracle is known for having tried to buy a MIG jet for pursuing his private passion of speed and flying but he could not get it through US customs. These "free" software companies make money on maintenance and support to enterprise for their Linux based software products. And the most substantial proponent of Linux has been IBM.

There is a well-founded view that this move by Microsoft will divide the enterprise Linux arena into two camps: Microsoft-Novell and Red Hat-Oracle. Actually, make that three as you have to throw IBM in there too. And note the continual threat of litigation as noted in this article: this is where Microsoft's potent cash generation can be deployed effectively since in contrast to young, ambitious software engineers, you can get good lawyers by trading their service for cash only. So there we have it--an open standard being slowly absorbed by the incumbents. A potential disruption that is trending toward "sustaining" for the incumbents.


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