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Peak everything seems to include peak free software: Ohloh’s chart of lines of code contributed to free software projects (split by programming language) mirrors the charts for pretty much everything else these days (except gold, hurrah!)
Ian Lynch posted CC-BY-SA slides from a recent Manchester Free Software meeting. Lucy Bridges explained that “Ian spoke about The Learning Machine Ltd (TLM), an awarding body for the INGOTs accreditation. The INGOTs are an innovative award that teaches children about IT while also making money using and promoting free software. In the talk itself Ian spoke of the ways to create a business involved in FOSS and how using FOSS can advantageously disrupt the status-quo.”
Some good news:
Shares of Microsoft (MSFT) fell to a new 52 week low after an unexpected earnings miss. Let’s take a look at the headline news followed by a discussion.
Reuters is reporting Microsoft stuns with profit miss, to cut up to 5,000 jobsMicrosoft Corp stunned Wall Street with disappointing results that included plans to slash up to 5,000 jobs and a warning that profit and revenue will almost certainly drop over the next two quarters.As bad as this result was, imagine the carnage had Microsoft bought Yahoo for its offer of $44.6 billion ($31 per share) back in February. Microsoft got lucky when Yahoo rejected the offer, demanding $40 per share. See Yahoo to Reject Microsoft Bid for details.
Microsoft’s shares dropped 9 percent, adding to a 40 percent decline in the past year. It blamed the miss on the weakness of the PC market and the popularity of low-cost netbook computers, which have combined to badly undercut sales of its dominant Windows operating system.
The market has become so volatile, Microsoft cautioned, that it has decided against issuing earnings or revenue forecasts for the rest of its fiscal year ending June 30, 2009 — other than to predict both will very likely be lower.
“The fact that they are withdrawing guidance is really bad. It adds to uncertainty. It is pretty bad when things are deteriorating so fast that even the largest companies in the world don’t know how rapidly it is happening,” said Jefferies analyst Katherine Egbert.
Microsoft posted a profit of $4.17 billion, or 47 cents per share, in its fiscal second quarter ended December 31, versus a profit of $4.71 billion, or 50 cents, a year earlier. Analysts were looking for earnings per share of 49 cents, according to Reuters Estimates.
Microsoft said it will eliminate up to 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and information technology over the next 18 months, including 1,400 jobs on Thursday. That amounts to about 5 percent of its estimated 96,000 work force, the biggest ever cuts by the software maker.
Yahoo is currently trading at $11.44 and Microsoft would have been without a monstrous pile of badly needed cash.
Microsoft, An Aging Gorilla
Microsoft is an aging Gorilla facing many battles. The first is declining PC sales as discussed above. A second more serious problem is that it’s products are too expensive and too buggy. A third problem of Microsoft is a shift to web-based services.
Free versions of word processors and spreadsheets by OpenOffice (OO) have cut off growth of Microsoft’s flagship Word and to a lesser degree Excel. Corporations use Microsoft products predominantly because they are used to using them. There is no fundamental reason to do when it comes to word processors.
As for Excel, Micosoft has an advantage in graphics, but most can easily do without. Over time, OO spreadsheets will improve, negating, perhaps even reversing that advantage. As for right now, why should corporations pay for Excel for everyone, when perhaps only a small percentage of users need the extra features of Excel? A better business decision for corporations would be to provide OO for everyone, and on a case by case basis provide Excel to those who really need it.
Finally, there is a fundamental shift in the industry to web-based services by Google and other providers. These products are also free. This too is eating into the demand for Microsoft products.
The day of reckoning is at hand for Microsoft. Many US corporations currently married to Microsoft software will start looking long and hard at its products, from multiple angles. That Microsoft could not provide forward guidance is proof enough that its products are simply too expensive for this deflationary environment where every penny counts.
OO is the epitome of deflation. You can’t beat free.
Recently Miguel Sousa left a comment here that questioned “why voluntary payments are the most profitable way business can be done for artists” and here is more evidence: Nina Paley is a film maker who is making her film free to make more money:
Audience, I trust you … First I must decriminalize it to the tune of about $50,000 [plus] many strings: a “step deal.” … promotional copies are traditionally exempted from step deals … I will place promotional files of the entire film - at all resolutions, including broadcast-quality, HD, and film-quality image sequences - online at archive.org and as many mirror hosts as volunteer to share it. I will license it … Creative Commons Share-Alike or … the GNU/Linux license [to] prevent it and any derivative works from ever being [restricted] by anyone, [except] the songs … “But Nina, how will you make money?” The way artists always make money: donations, commissions, grants, patrons, speaking fees. … In the Digital Age, distributors function primarily as a barrier between artists and audiences, prohibiting access rather than facilitating it. I’m betting that you, audience, can find me more money - and certainly wider distribution - than a commercial distributor could. Here are [six] ways I imagine copylefting Sita could generate some income for me…
Nifty corners. Heh.
The gas crisis continues: “States of emergency declared across Europe over gas … 12 countries received no Russian gas at all yesterday: Austria, Bulgaria, Slovakia, the Czech Republic, Bosnia, Croatia, Greece, Hungary, Macedonia, Romania, Serbia and Turkey. France, Italy, Germany and Poland reported that their supplies from Russia were markedly down.”
Reuters is reporting the end of print. For real.
Many media experts predict that 2009 will be the year that newspapers of all sizes will falter and die, a threat long predicted but rarely taken seriously until the credit crunch blossomed into a full-fledged financial meltdown. Some papers no longer print daily, and some not at all.
Of course, the recession appears to be good for free software, and I hope free software fonts, but, I’m concerned that Mike Ruppert is right that liquid fuel is the most critical infrastructure in the economy and that this “one steep initial crash [will be] followed by a flattening out with maybe a flicker of recovery, then off the cliff we go.” Russia cutting off the Ukraine’s gas is a bad omen.