Microsoft's Latest Kiss of Death

Embrace. Extend. Extinguish.

That's how Microsoft (Nasdaq: MSFT  ) killed Netscape many moons ago. Embrace this newfangled "Web browser" market with a new product. Extend the existing Web standards with proprietary technologies like ActiveX. Extinguish the competition by denying them access to those fancy new features. When it works, this is a great way to build and maintain wide, alligator-filled business moats.

It seems to me that Mr. Softy is up to his old tricks again. The target this time is the OpenDocument standard, a free and open alternative to Microsoft's own Office formats for text documents, spreadsheets, presentations, and more. The standard's biggest proponent so far is Sun Microsystems (Nasdaq: JAVA  ) and its StarOffice/OpenOffice software packages, but other alternatives like Google (Nasdaq: GOOG  ) Documents, IBM's (NYSE: IBM  ) Lotus Symphony, and Corel (Nasdaq: CREL  ) WordPerfect come with ODF support, too.

With such widespread support for the upstart format, you might expect the leading office suite to simply let you load and save documents like any of the other software packages might. After all, Office itself has been around for decades, and we should expect it to support pretty much any wrinkle and quirk that the ODF working group could come up with. But it's not that simple.

Instead, Microsoft has put up a Web site full of "implementation notes" for this new feature, which will be added in a service pack for Office 2007. Office will write "additional data" into its files, and there are "implementation variances" from the published, open standard -- all according to a set of "implementation decisions."  We’ll have to wait on the specifics, but this sounds eerily reminiscent of IE-versus-Netscape to me.

The difference here is that Netscape was a corporation, too, with secrets to keep and proprietary dreams of its own. The ODF format is an XML-based standard, supported by a proper working group and by countless open-source programmers around the world. This time, any attempt to introduce incompatible new features into the new technology will just be met by near-instant upgrades to the standard itself, and the other guys will soon have similar features of their own.

Open standards have grown up a lot since the 1990s, Redmond. I think you can forget about the "extinguish" part of your old strategy. By extension, your Office monopoly is coming to an end -- not tomorrow, but certainly in our lifetime.

Further signs of the apocalypse in Redmond:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers selection. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. He hasn't seen WordPerfect running since 1998. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On December 18, 2008, at 5:21 PM, SteveTheInvestor wrote:

    Indeed, I refuse to buy Microsoft office software because of their attitude toward any potential competition. I would love to buy their office suite in that I find it useful at times. However, I'll just stick with Open Office in that I refuse to enable monopolists that are only concerned with limiting my choices.

  • Report this Comment On December 18, 2008, at 8:09 PM, JeffreyYang wrote:

    Mr. Anders Bylund's analysis is total nonsense.

    Netscape : ActiveX is a total failure, and the limited support of Microsoft's browser extension by most web sites means that it has no effect regarding the demise of Netscape. Netscape failed because it's technical depth is too limited, about the same as a Microsoft Word's development team, they are too arrogant to see that until it's too late

    OpenDoc : Mr. Bylund characterized Microsoft's "implementation notes" as Microsoft's attack on OpenDoc, but the truth is exactly the opposite. Microsoft Office is dominant long before OpenDoc, so it will have many implementation

    detail that can not be done or too costly to do in OpenDoc, that will give OpenDoc a ammunition to attack Microsoft.

    OpenDoc is a political successful and technical failed movement against Microsoft Office. And here is why :

    1. OpenDoc is based on XML, a simplistic standard that is good for strictly hierarchical content, but won't cut it when more sophisticate storage structure is needed. Any second year computer science student can tell you that. Those "guru" in OpenDoc should be send to prison for their incompetence. The world of data is too rich to be restricted by XML.

    2. OpenDoc will not allow user to switch from one office application to another. Document format is only one small aspect. Presentation, interaction, looks and feel, etc, are much more important in defining an office application, and there is always need for proprietary extension. The same thing done by Microsoft that is called anti-competitive will be hailed as innovation by any other company.

    3. As a political tool, OpenDoc is great. Any government can just declare that they require open standard, and that will shut Microsoft out. And this is really where the value of OpenDoc comes in. This is why Microsoft want it's OpenXML as an open standard, despite that it is a technical garbage.

    Let's face it, the success of Microsoft product is mostly because they are at the right place in the right time with the right people. To quote Mr Bylund :

    "When it works, this is a great way to build and maintain wide, alligator-filled business moats."

    but it does not work, it only slightly improve the odds

    .

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