Microsoft warns open-source threat may force them to cut software prices

“Microsoft is warning that the success of the open-source movement could hurt its sales, potentially forcing the software giant to cut prices and sacrifice both revenue and profits. ‘To the extent the open-source model gains increasing market acceptance, sales of the company’s products may decline, the company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline, Microsoft said in a filing last week with the Securities and Exchange Commission. In the filing, the Redmond, Wash.-based company paints a picture of two contrasting business models–its commercial software development model, in which a single company bears the costs of developing software and reaps the financial benefits of the work; and the open-source model, in which, says Microsoft, software is produced by global ‘communities’ of programmers, and the resulting software and the intellectual property contained therein is licensed to end users at little or no cost. A Microsoft representative was not immediately available for comment… Microsoft has long criticized the economic underpinnings of the open-source movement. ,” reports Stephen Shankland for CNET Full article here.

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