12-25-00
Microsoft Invades New Turf

One software sector has felt itself immune to Microsoft assault - developers of Windows based accounting and business management software. These developers proudly call themselves "Microsoft Partners" and cite Microsoft's commitment never to compete with it's partners.

That commitment is now revoked. Business management software publishers are the next to learn that in Microsoft's lexicon, a "partner" is a victim they haven't gotten to yet. Software companies will soon be dropping like flies.

I started predicting the Great Plains purchase and its consequences a couple of years ago. Here's an example (not the earliest, but one easily found on the Internet). If you think I overstate the case, read Avoiding the Dancing Elephant, the Mary Jo Foley article my note responds to.

Contents:

• Impact on Business - What this means to you.
• "That's Just Not So!" - What the software industry will say.
• Is This Good for Your Business? - Advantages and Disadvantages.
• Alternatives - Must you "get with the program", or is there another way?
• Who Cannot Use Alternatives
• What We Recommend
• Links - Microsoft press release and others.

Impact on Business

In face of criticism, Microsoft will claim these hooks could also be used by other software developers, but others "have chosen not to take advantage of them". Other developers will explain why they couldn't, but nobody will be listening.

The end result: most Windows based businesses will be using Great Plains within a few years. If your company is committed to the Windows platform, you might as well start planning your migration now. Your current vendor probably won't be in business much longer.

Currently, Great Plains is a bit upscale for many businesses, but that will be fixed. A "Great Plains Me" will be put in place to serve small businesses at Peachtree level. Probably this will be done by buying another company and just calling its product "Great Plains" until developers can merge it with the main product. A POS (Point of Sale) module will finish off the set.

The kitchen table accounting market will stay with Intuit (Quicken and Quickbooks) for now, but Intuit is so tightly in bed with Microsoft that hardly matters (there will never be a Quicken for Linux, so don't hold your breath).
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"That's Just Not So!"

These arguments are without merit. It has been adequately shown (by Microsoft's success) that most business software buyers don't want choice. They want just one significant vendor, and they will pay more and accept less in order to achieve that freedom from choice.

Most businesses will adjust their way of doing business to fit the Microsoft products. There will soon be an erie sameness to the way business is done from one company to another.

Microsoft will answer the niche markets by issuing add-on packages for specific types of business, and "development partners" will finish things up by using VBA (Visual Basic for Applications) to adjust the packages in Microsoft approved ways.

[ UPDATE: - 28-DEC-00 Petition to Department of Justice ]
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Is This Good For Your Business?

Staying on the Windows path means embracing an "All Microsoft" environment. You will find it increasingly difficult to run any significant non-Microsoft applications, so we can presume essential uniformity for all Windows based businesses to the same extent we can presume Windows and MS Office today.

Advantages:

• Your information system will be just as good as that of most other companies in your business, because they will all be the same.

• Trained employees will be easy to hire as most will already be familiar with the exact system you have.

• All technical support for your applications will come from one source.

• You don't have to worry about your software publisher being put out of business by Microsoft.

• You will have an easy time exchanging files and documents with most of your business partners because they will be using exactly the same software you are.

• If you are a management employee, you never have to take flack for a wrong IT decision - you simply had no choice.

• If you are the owner, you don't have to agonize over IT decisions, they have already been made for you in Redmond.

Disadvantages:

• Will you be competitive doing exactly what everyone else in your business is doing? Will you be blindsided by a competitor who creates a more effective environment based on Linux or AS/400?

• A Microsoft solution is always the most expensive compared to any other appropriately scaled solution. The initial costs used to be lower, but support costs and continuous upgrades quickly changed the picture. Now, with Linux as the main competitor, initial costs can be way higher than the competition.

• Microsoft's need for revenue growth, coupled with little success entering new markets, means they must squeeze more revenue out of their existing customer base - that's you. Here's why.

• Extending the Microsoft security model into your accounting software is little short of insanity. This model will not be changed, because tight integration is a major Microsoft selling point (and locks out competitors).

• Windows based accounting takes about 1/3 more staff than text based accounting. Accounting is text, and graphic screens simply slow workers down and require more expensive hardware (but those pretty screens sure make Windows accounting an easy sell to management). This is why so many companies still run DOS based accounting - DOS works.

• Your employees will find it easy to take their skills to a competitor, because exactly the same system will be in use there.

• Examine very carefully the implications of Microsoft's .NET initiative, including "Software as a service" (billed monthly) because it is where you are headed. You will no longer have a perpetual license to the software on which your business depends, and your critical (and confidential) data may no longer be stored on your own computers. This is how Microsoft explains what .NET is, but Help Desk explains it more clearly.

• Microsoft will require access to your computers. This they already do. When your computer is attached to the Internet, Microsoft applications contact Microsoft and exchange information. When you view a Microsoft site, Active Update is free to make changes to your computer without your knowledge. Microsoft says this is to "improve the user experience".

  Microsoft says all that goes on is some updating and little information is transmitted to them. They have flat-out lied about this before. They said the Windows95 install wizard did not send information to them about what software you had. Expert disassembly of the wizard showed it searched for 200 applications on your hard disk and sent an encoded list back to Microsoft.

  Major parts of Microsoft's Web site are already blocked to anyone using a Web browser that does not allow Microsoft access to the computer it is running on (Netscape, Mozilla, Opera, Internet Explorer v3, etc.).

• Microsoft has strongly backed (and financed) UCITA. This state contract law gives them the right to enter your computer without your knowledge or permission and the right to disable any Microsoft software, if in their opinion, and their opinion alone, you are not in compliance with their license. Since you will be required to have an Internet connection to run their software (see .NET), they will have access to your computers and network.
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Alternatives

For many larger companies the costs and conditions of Windows are already unacceptable, and they are rapidly deploying Web based applications. These are server based and run on any device that supports a Java enabled Web browser - devices ranging from hand helds to supercomputers - cell phones and toaster ovens soon. This is mostly custom development at this time, which is often impractical for the small business.

For the small business that objects to the rising cost of Windows and ever increasing control by Microsoft, there are viable alternatives available now - even if some Windows software must be run.

• Windows Workstations, Linux Servers: This environment is very practical now, and many companies are saving a lot of money by deploying Linux file and print servers instead of NT/2000. Linux costs a lot less, is faster and far more stable.

  For client server applications, all the major database vendors have Linux versions of their products available (Oracle, IBM (DB2), Informix, Sybase, etc.) so software written to these databases will run fine with Linux servers. The only significant player missing is, of course, Microsoft's SQL Server.

  While this configuration saves a whole bunch of money for many companies now, it must be considered a temporary environment. Microsoft will eventually move against it by requiring Active Directory to run any of their software. Active Directory requires a Win2000 server and will soon require Win2000 Pro or Whistler on all the workstations.

• Linux Workstations with Windows compatibility, Linux Servers: This configuration allows running a few Windows programs that are not yet available for Linux. There are several emulation and VM (Virtual Machine) packages that allow this, and some are quite good.

  The best of these now run Microsoft Office and other difficult packages with good performance. They will not run most games (because Microsoft DirectX is not supported) or most viruses, but running these is not generally a high business priority. Linux also supports running DOS software.

  We recommend this environment as a transition to an "all Linux" environment. In particular it allows running specialty software like tax preparation packages that won't be ported for some time.

• Linux Workstations, Linux Servers: Some companies are already running this environment and it's quite practical for general business. Several office productivity suites are available. StarOffice in particular provides the functions of Microsoft Office and converts files to and from MS Office formats quite handily - and StarOffice is free.

  A lot of specialty business software is available because much SCO Unix software runs fine on Linux with iBCS. Nearly all SCO based software will be ported to Linux soon (Linux publisher Caldera has acquired SCO's Unix properties, software developers and dealers).

  If you can run in this environment, your costs will be lower than possible with any other environment.

• Thin Clients, Linux / Unix Servers: This is the environment of the future for many businesses. Web enabled applications can be used from any device with a Java enabled web browser. Users can step up to any computer or other device and have their own desktop environment anywhere they can plug into the network (or the Internet).

  As mentioned above, larger companies are already implementing this environment themselves, and many companies are using software like Tarantella to Web enable existing applications during the transition. It will take a little while for all this to filter down to small business, but it is coming.

  This is very similar to what Microsoft's claims for its .NET initiative, but .NET requires you to use Microsoft services on remote servers and to have an Internet connection at all times to access those services (which also allows them access to your systems). Implementation in non-Microsoft environments does not require an Internet connection, and with Linux you can flat out own the whole kit and kaboodle.

• OS/2 Workstations, OS/2 or Linux Servers: Absolutely the most elegant and easy to use desktop environment - OS/2 is what we run in our office. We use a mix of modern OS/2 software, older DOS applications and Linux / Unix ports. OS/2 is especially good if you need to mix a lot of DOS applications into a modern environment.

  Most banks run on OS/2, as do many other businesses with critical reliability, performance and security needs.

  One problem: Microsoft recognized OS/2 as far better than what they had, and did everything within their power to kill it, primarily by threatening software developers that intended to write for it.

  OS/2 is now getting a lot of new software because Unix / Linux applications are easily ported to OS/2, and because Java applications run on it just fine.

We have quite a few clients using Linux servers with Windows workstations. The problem is, some of them tend to forget they even have a server. Or maybe that's not a problem. Some of these were put in new instead of NT servers, others replaced Novell NetWare servers during the Y2K upgrade.
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Who Cannot Use Alternatives?

• You depend on any Microsoft Back Office server process, like Exchange Server, IIS (Internet Information Server), SQL Server, BizTalk Server or the like - these run only on NT/2000 Server. On the other hand, there are alternatives to all of these, some of which are compatible with the Microsoft products, and almost always at lower cost.
• You depend on support from a software vendor who refuses to support his product with anything but an NT or 2000 server - even though his product runs just fine with a Linux server. He's headed for extinction anyway (see above).
• If your objective is to take the path of least resistance regardless of cost. You will meet plenty of resistance if you use alternative environments, especially from people who would be making a lot more money if you were running Microsoft.

What We Recommend

Of course, you could hire us to evaluate these issues for you, and then we could tell you a whole lot about them.

What we do recommend is that you take a hard look at alternatives, especially at a multi-step migration toward the Thin Client, Linux / Unix server environment (you can still use PCs too, you just don't have to). It really is the environment of the future (we do not expect .NET to ever be completely implemented).
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Andrew Grygus

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