Buying outside the Microsoft box

LAST week, Microsoft was handed another red card for its monopolistic practices, this time by the European Union's antitrust authority. In its ruling against Microsoft, the European Commission imposed a US$613 million (S$1.04 billion) fine and demanded that certain software components be unbundled from its flagship Windows product. Microsoft was also compelled to divulge part of its Windows source code in order to allow competitors to develop software more compatible with Windows-based computers.

In the near term, the ruling is unlikely to have a significant effect, either on the software giant's fortunes or those of the IT industry as a whole. Microsoft, with a decade of experience in fending off US federal regulators, has already launched a legal appeal against the EU ruling that could bog the case down for years.

Given the speed of technological development relative to the glacial pace of the legal process, any punitive measures specific to current software standards would be obsolete by the time a final settlement is reached.

Pundits have pointed out that the ruling could raise the cost of computing for European businesses and consumers, if users have to separately purchase software once bundled into their Windows systems. And the fine - pocket change for Microsoft - is at any rate likely to end up in further purchases of Microsoft's ubiquitous products, as part of the EU's IT spending.

There is little to suggest that the EU, accounting for only 20 per cent of Microsoft's global market, could reverse the software giant's market domination. But the case is indicative of the growing institutional discontent worldwide over Microsoft products, particularly in the wake of serious security vulnerabilities exposed by online attacks in recent months.

Still, competition in the long term cannot be generated through legislation; it must arise from alternatives with superior value propositions.

The motivation and the means now exist. The pervasiveness of the Internet - which was not so ubiquitous when Microsoft first conquered the IT industry in the 80s and 90s - demands that different computers around the world work with one another seamlessly. This 'interoperability' principle means that users now have far more viable options in meeting common IT needs without tying themselves down to one platform or vendor.

The Internet has also fuelled the rise of the 'open source' movement, where industry-strength software is co-developed and released publicly by an open community of users rather than licensed from proprietary patent owners like Microsoft.

Many open source products (which include the Linux operating system that powers much of the Internet) have gained converts among mainstream government and business users worldwide.

The decisive battleground could be Asia's emerging markets. In most of the region, Microsoft flexes its monopolistic muscle unchallenged, enjoying strong bastions of support in, for instance, Singapore's government-led IT sector, and helping to drive the early years of the IT boom in India.

Yet Microsoft's sales penetration into the region has been dampened by rampant software piracy. Ironically, its efforts to curb piracy also slow down the adoption of its software as the de facto standard in emerging economies.

Burgeoning markets like China - eagerly courted with technical and financial sweeteners by the technology giant - have also been coy to its advances, leaning instead towards home-grown solutions such as RedFlag Linux and RedOffice (a free alternative to Microsoft Office).

At present, these immature Asian software offerings are unlikely to displace Microsoft's flagship products. But a more confident China and India, harnessing their growing technological know-how and massive domestic market, may well have the wherewithal to drive widespread adoption of alternative technologies within their expanding spheres of influence.

Several factors are at play: the cost-effectiveness of home-grown or open source solutions for cash-strapped start-ups in developing economies; superior support for local languages and administrative practices; even a nascent nationalistic instinct.

Singapore has benefited as a preferential partner and regional base for Microsoft over the years. As a relatively small if spunky player, it can hardly afford to buck the current Microsoft hegemony over the global IT industry on its own.

Still, there is no need for our allegiances to be so absolute. With its advanced infrastructure, business expertise and tech-savvy population, Singapore is an ideal hotbed for contributing to and testing open source technologies, particularly those with a view to servicing the Asian market.

The Asian Enterprise Open Source Conference held here in October last year, sponsored by IDA (Infocomm Development Authority) and EDB (Economic Development Board), was a quiet nod in this direction.

Most government agencies still shy away from employing open source or other non-conventional solutions - even those with a sound track record in the market. But certain sectors have a history of buying outside the box. The creative industries have long been investing in the Apple Macintosh platform. The IT industry is conversant with Open Source software such as Linux, Php and MySQL - arcane-sounding options, no doubt, but costing tens or even hundreds of times less than proprietary equivalents.

Small and medium-sized enterprises stand to gain most by considering IT alternatives that may give them a bigger leg up per dollar without compromising their business needs.

As the comfort level with their use rises in mainstream business, companies should prioritise business needs and costs over big-brand software in their IT investments. The market can then speak for itself, perhaps opening a window of opportunity for Singapore to spot and shape an Asian successor to take on the giant from Redmond.