Posted by Thomas Crampton

Just returned to Paris from Munich where I went to write a story on the progress of Open Source implementation by the city government: Microsoft Chief Dines in a Linux City

The project has been troubled but is still on track.

Attended a small dinner hosted by Dr. Hubert Burda of Hubert Burda Media that was attended by the CEOs of BMW, Adidas and other major German companies. Steve Ballmer, the guest of honor, spoke briefly about Open Source and Google.

Ballmer clearly views Google as enemy number 1. He said something like Google had better watch out because the people in Microsoft will be forced to work “harder and harder and harder and harder and harder and harder until we offer better services” repeating the word half a dozen times. Quite forceful and you can see his drive.

He was also interesting about the future of the corporation when confronted with open source. Corporations offer consistency over time and user support, Ballmer argued.

Several members of the audience disagreed: “Have you ever tried to call Dell or Apple or Microsoft for a problem you have? No, you go to online forums to look up what other users recommend.”

As for consistency over time, one reason the city of Munich went for Open Source is that they were angered about being forced to pay for an upgrade to Windows XP.

They expect the savings, however, is expected not in the licensing fee for the software, but in the ability to switch service companies. If you buy Microsoft, only Microsoft can provide servicing. If you use open source, you can change service providers.

To come back to the original question: How will corporations look in a world where collaborative volunteer efforts do things for free on the Internet? Will corporations disappear?

9 Comments

"Will corporations disappear?"

I suspect that you meant to ask "will software vendors disappear"? Open Source will bring even more technology companies into being, but they will be primarily service and support companies (which you mention) rather than product companies. In most cases, it still makes sense for those companies to be limited-liability corporations to protect the investors and employees. Even charities incorporate.

It depends on the sector that the corporation serves. It's easier to tap into volunteer efforts for non-utility related services, but I would probably lean more toward a corporation when faced with a utility need or requirement.

this is interesting. especially the "support"-thing. I never would ask m$ when I have problems with my pc or something. without the internet and m$-support only we still would use win95.

corporations will never completely disappear. but they have to make a change. they have to rethink their philosophy which today says we-produce-a-lot-of-crap-but-maybe-something-will-be-good-if-not-who-cares-we-make-money-anyway.

and they are TOO powerful of course. we'll see.

the hard ballming Hitler

Very high-profile group you were. Sounds like Ballmer was dying to make his point, at least to leave a positive impression. However, it also sounds as if he did not succeed, rather overdid his jug, no?

Do you really believe that companies will be able to survive solely as an open source software service provider? Is this the world we want to live in...half baked software and cheapo service providers? I don't think that model will survive, what do we do after all the eager beavers writing OSS put software companies out of business?

The future of corporations? That's an excellent question! I think the open source mentality is part of the answer (as Benkler's "Coase's Penguin" suggests), but that's only part of it. There are issues of leadership (based more on referent leadership, rather than on reward/punishment or celebrity charisma). And there is the question of the metric used to measure "goodness" - I would suggest that profitabilty probably isn't adequate any longer, in a world in which scarcity is not the issue, and the drive for profit has just about bankrupted us all relative to our planet (not to mention morality and ethics). Additionally, I think we need an alternative reading of management history from the late 19th through the 21st century that both explains where (and why) we've been, and the effects at the current break boundary. There is much to consider, but I'm still working on it.

Hans, I have to agree. I watched the Steve Ballmer video of this event and he really does use his arms and his body just like Hitler!

It was screamingly funny though hauntingly familiar.

Here's the link. You may have to download the Quicktime movie to your hard drive to view it though:

http://www.loiclemeur.com/english/2005/10/meeting_steve_b.html

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