Apparently Apache has dropped from its historic 60% market share to less than 50%. Open source advocate and author Glyn Moody wrote Friday:
Until about 18 months ago, Microsoft was strangely passive in the face of Apache's overwhelming market share, which had hovered around the 60% level for some four years. It was as if it simply did not know how to attack something that costs nothing and that is not the product of a conventional company.
But at the beginning of 2006, an edict obviously went out at Microsoft that something had to be done, whatever the cost. Given the extemely sharp uptick in Microsoft's share, this clearly wasn't just a matter of trying harder: it scored some very big wins very quickly – doubtless major players in the hosting sector were made offers they couldn't refuse.
This is a serious development, for several reasons. Obviously, a move towards Microsoft's closed code represents a setback for free software. More IIS means more use of associated Microsoft products and technologies - Windows, ASP.NET and so on. This, in turn, is probably bad for the Internet as a whole, since these technologies have shown themselves to be more prone to security issues than open source alternatives.
But the worst aspect of this latest development is that it gives Microsoft hope. It shows that it can fight back against free software, even when the latter seems to have a completely impregnable position. At a time when Firefox is steadily adding market share and chipping away at Microsoft's own market dominance in the browser sector, Apache's emerging vulnerability is a very dangerous signal to send.
I have liked Moody’s work ever since reading his book on Linux, which makes my list of the best open source resources. In his postings on Linux Journal, Moody has been more of a propagandist for the cause rather than a journalist or other impartial chronicler. That it wasn’t obvious in the book (his portrayal of Linus was no more sympathetic than the typical biography) is a testimony to his professional capabilities.
Even if I don’t agree with his conclusion — Microsoft gaining ground being the end of the world — I certainly agree that the gain is bad for open source advocates and good for proprietary software companies.
I can’t say it’s all that surprising — I've been saying for 3-4 years that all Microsoft had to do to gain share is to tweak their pricing and/or key terms. Jason Dedrick & I noticed this about four years ago when doing our study of Linux adopters. Everyone assumed Linux had a cost advantage over Windows NT, but we found that Windows was actually cheaper than Red Hat for universities because Microsoft had a university discount and RH was clueless and did not. (University discounts to win software adoption are at least 30 years old — that RH didn’t feel a need to cut their price at all for universities suggested extreme complacency.)
It was clear then — and now — that Microsoft has big gross margins, and thus can selectively discount to win adoption. I don’t think Microsoft’s marginal costs are higher than Red Hat’s, and clearly Microsoft has greater scale economies. So I’d consider this as the harbinger of a longer-term response by proprietary firms, rather than a one-time abberation.