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  • Yes, Microsoft Loves Apple’s — Money!

    March 25th, 2008

    When you see the names Apple and Microsoft, you are probably reminded of a great war between two technology giants, may the better company survive. Of course, in the real world, that’s not really what’s happening. In fact, these two companies have a long, if shaky history of actually working together when it suits their mutual purposes.

    Take the ongoing development of Microsoft Office for the Mac. Microsoft’s 200-member Mac Business Unit is regarded as the largest independent developer of Mac software on the planet. Whether you like Office or not, it is an industry standard, and the Mac version is generally regarded as, in most respects anyway, superior to the Windows edition. It’s also a cash cow for Microsoft, delivering an estimated $200 million in profits every single year. So Microsoft keeps it going.

    But make no mistake about it. Should the day come when Mac users prefer iWork or another Office alternative, you can bet that Microsoft will drop their Mac Office like a hot potato and redeploy the Mac BU to other departments in the company, or to the unemployment lines.

    Now Microsoft is eyeing the arrival of the iPhone with dollar signs in their eyes. First, they made a deal with Apple to license ActiveSync for the iPhone. This means, come the release of iPhone 2.0 firmware in June, that you’ll have full support for a company’s Exchange email. What’s more, they’re busy looking over the iPhone SDK for possible application opportunities — applications you’ll be able to download, for a price of course.

    Now doesn’t that put Microsoft’s own mobile initiative at somewhat of a disadvantage? Perhaps, but that’s no the point. You see, Microsoft earns the big bucks from Exchange Server licensing. In that universe, paying ten grand per company and lots more isn’t out of the question. So knowing the iPhone can access corporate email using Microsoft’s software will only encourage wider adoption of the package. So Microsoft’s bottom line is boosted. How much of an effect this might have probably isn’t certain, but as the iPhone spreads into the enterprise in the coming months, you can bet that corporations will seriously consider the Exchange alternative knowing it’s fully compatible.

    I only wonder, in passing, why Entourage 2008 apparently doesn’t deliver 100% Exchange support, but I suppose it’s close enough not to concern most users. Or am I wrong? Well, if I am, I know you’ll be happy to correct me.

    Another way Apple has really helped Microsoft is with the switch to Intel processors. Sure, that essentially killed development of Virtual PC for the Mac, but the truth is that Parallels acted so quickly in building a credible virtual machine alternative that Microsoft didn’t have time to compete. They don’t spin on a dime.

    But no matter. Every sale for Parallels Desktop or VMWare Fusion means a potential sale for a retail Windows XP or Vista license. No, not 100%. Some of you already have valid Windows licenses, or prefer to run a Linux distribution or a different operating system instead. But certainly a lot of Mac switchers require Windows, if only as a crutch. That’s good news for Microsoft, since it earns far more money from retail licensing than from OEMs, where PC makers pay a mere fraction of the regular Windows pricetag.

    So you can see that the greedy part of Microsoft’s leadership — and it’s a huge part — is enjoying the fact that more and more Macs are being sold at the expense of Windows boxes. Another factor: When it comes to something like Office for the Mac, support costs are far less too. That means that a larger portion of the dollars they receive can be used for purposes other than paying support people.

    Now when it comes to the renewed browser wars, just how do companies profit from something that’s supposedly free? Well, with Microsoft, by attempting to enforce proprietary standards, they increase sales for their own products. With Apple and Mozilla, they get a little of that pay-per-click money from using a search engine embedded in the browser. Apple restricts the choice to Google and only Google, whereas Firefox gives you Yahoo, Answers and some others. In each case, your use of those search engines and, one hopes, clicking on one of the ads that appear in a search window, helps enrich them even further.

    In short, neither Apple nor Mozilla are losing so much as a dime in providing free software. Together, they help enforce compliance with industry standards. As to Microsoft, well, one attempt to stem the erosion of Internet Explorer’s market share is version 8, now in public beta. That application promises improved support for those same Web standards. This means, if there’s widespread adoption of the new version of course, that Web developers won’t have to work so hard developing custom versions of their code to work in MSIE.

    Now I don’t have to do a lot to make my sites compatible. But I also have better things to do with my time.

    Meantime, so long as Apple can help enrich Microsoft, these two titular rivals will remain fast friends.

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