Microsoft listed Open Source software as a top “risk factor” and challenge to their license-based software model in the annual 10-K report published recently. Competitors distribute open source software at “nominal cost,” making money off services instead of the software.
Moreover, these open source software companies, unlike Microsoft, “do not have to bear the full costs of research and development for the software. To the extent open source software gains increasing market acceptance, our sales, revenue and operating margins may decline.” the report alleges.”In recent years, certain ‘open source’ software business models have evolved into a growing challenge to our license-based software model,” the reports states.The report adds: “These competitive pressures may result in decreased sales volumes, price reductions, and/or increased operating costs, such as for marketing and sales incentives, resulting in lower revenue, gross margins and operating income.
Click here to access the report here.
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