At RedMonk we have been doing a fair bit of work lately trying to work out where the industry is heading, as the way we use and value code changes. For example – Red Hat is the defacto standard for running enterprise workloads. 10 years ago such a franchise would surely have made them the biggest company in the world from a revenue, and a market valuation perspective. Today Red Hat is a well respected and well run company, but it only hit the billi0n dollar revenue mark this year. Google runs on Linux, and has what must be the biggest Linux server farm in the world, but it doesn’t sell Linux, it sells ads.<\/p>\n
I have been saying for a long time that the best packager wins, and wins big. Everyone now seems to be thinking the same way, since Apple blew everyone else, with their horizontal integration models, out of the water.<\/p>\n
So the news that Microsoft just posted a quarterly loss<\/a>\u00a0for the first time in its history,\u00a0of nearly half a billion dollars, is striking. After all Microsoft has hitherto been a technology builder, not a packager. It is a Software Company<\/em>. Ironically, the reason Microsoft took the loss is because of a write down on its Aquantive acquisition, which it made… in order to better compete with Google<\/a> in the online ad space. But winning in online advertising is always going to be hard if you also fund Facebook.<\/p>\n When I say the End of Software I am perhaps trolling a bit, but End can also mean goal. That’s the real question: what is the goal of software, and should it be a goal in itself? As Stephen has been saying a lot lately- its a means, not an end. \u00a0Its important to stress that Microsoft is still a strong company by many measures, but it is also a company facing existential challenges. Paid software can no longer be the goal, when the new kids on the block are all giving it away.<\/p>\n For further reading you should definitely check out:<\/p>\n