I guess hanging with Facebook is making Microsoft (Nasdaq: MSFT) less of a bully these days.
On back-to-back days, Microsoft has announced initiatives that will widen access to some of its key products. Yesterday, budding video game developers got a bone tossed their way from Redmond. The company is opening up its Xbox Live marketplace to more third-party developers, including free distribution to those who work on making simplified software-development tools.
This morning, Microsoft aimed even higher, by tearing down many of the walls of its flagship operating system and productivity software to give third-party software makers easier paths toward interoperability.
We should probably thank Facebook for Microsoft's softer side. Then again, if you think the more relaxed standards will crimp margins as Microsoft opens the competitive floodgates, you can go ahead and blame Facebook.
Facebook, after all, revolutionized transparency last year, when it opened its social network for third-party developers to monetize at will. Everyone is hopping on the widget bandwagon these days, but Facebook got things rolling.
Now that Microsoft has a wee stake in Facebook and has become its ad-serving partner, some of Facebook's democratized charm seems to be rubbing off on the world's largest software maker.
Ready to play
Yesterday's Xbox Live move gave diehard gamers visions of sugarplums dancing in their heads -- or perhaps Halo baddies dancing on their heads. Programming has gotten easier, thanks to tools that streamline software development and freebies such as Carnegie Mellon's Alice, which simplifies the teaching of computer-language coding by making it accessible and entertaining.
Microsoft isn't going to open the Xbox Live marketplace up completely. Developers will still need to vet submissions before they show up on the site, but if your game is engaging enough to build a following, Microsoft just set you up with welcome digs in a cottage industry.
It could be a wide world of prospective game makers out there. My 14-year-old son would never consider himself a programmer, but as a guitarist and an uber-fan of Activision's (Nasdaq: ATVI) Guitar Hero, he routinely transcribes his favorite songs into game-ready tablature for his friends to enjoy. Maybe there's a future for him -- and countless others like him -- on the Xbox Live marketplace to share their creative sweat for profit.
Microsoft wins because it stands to gain from incremental digitally-delivered software sales. Consumers win because they have a new revenue stream to consider. Who loses? Down the road, perhaps established giants like Activision and Electronic Arts (Nasdaq: ERTS) might suffer. If quality indie titles start competing for bucks earmarked for their retail releases, those behemoths stand to lose more than they gain.
Microsoft gets IT
This morning's open source-friendly initiative is huge -- and similarly expected. Now that companies such as Salesforce.com (NYSE: CRM), Sun Microsystems (Nasdaq: JAVA), and Google (Nasdaq: GOOG) are delivering enterprise and personal solutions at attractive price points -- if not entirely free -- the public is being weaned off disc-based, hard drive-hogging software.
Microsoft can no longer afford to be the bully. It needs friends in high and low places, and the interoperability initiative will meet that need. Motivating developers to rally around the Microsoft platform was easy when Mr. Softy was the only game in town, and now it's planting the seeds for third-party software makers to back Microsoft even when those developers have a choice.
Are these the moves that will flip over Microsoft's high-margin applecart? We won't know for now, but since the cart was going to get flipped anyway, it's refreshing to see Microsoft do the flipping on its own terms.
If flexing its muscles can no longer get the job done, it may as well kill its rivals with kindness.
