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Microsoft model: Lose money on everything. Make it up in volume

This whole predatory pricing thing has been quite interesting. There are views all over the place.

I want to point everyone to Microsoft’s latest quarterly earnings (opens in new tab):

Here’s where Microsoft makes its money:

Client 2,458

Server and Tools 882

Information Worker 2,257

Microsoft Business Solutions (20)

MSN (13)

Mobile and Embedded Devices (17)

Home and Entertainment (433)

In other words, Business Solutions, MSN, Mobile and Embedded Devices and Home and Entertainment were money losers. Information Worker (Office), Servers and Client (primarily XP OEM), generated their profits.

Let’s look at what happened in the browser market: Microsoft killed Netscape. IE took over as the dominant browser. Within a few years, we had the massive attacks of adware and spyware. Coincidence? No. IE was an exploitable browser and it was suddenly the majority. Adware and spyware vendors took advantage of the monoculture of the browser space.

What about Access? Microsoft blew it out for $99 and killed Borland (my former employer). Then took over the high-end market with SQL. What happened? SQL gets slammed by worms and the effects have been horrendous. And how many security patches have we had with Access?

What about the Word viruses that plagued us years ago? These were horrific at the time, with whole companies being taken down.

Is a monoculture in security truly healthy?

Are we just whistling past the graveyard?

Alex is a technology CEO, with leadership, operating partner, investor, and board member roles at security firms including AutoLoop, Borland, Quarterdeck (now Symantec and Cisco WebEx), GFI/TeamViewer, Sunbelt Software (now ThreatTrack Security), BlueStripe Software, StopBadware, Knowbe4, Malwarebytes, and Runaware Holding AB. When CEO of Sunbelt he ran a security blog, and he still writes on security.