This letter from David Stutz is back from 2003, but still seems to me to be relevant. I found this via a post by Cory on BoingBoing.

Read on and enjoy

Digging in against open source commoditization won’t work – it would be like digging in against the Internet, which Microsoft tried for a while before getting wise. Any move towards cutting off alternatives by limiting interoperability or integration options would be fraught with danger, since it would enrage customers, accelerate the divergence of the open source platform, and have other undesirable results. Despite this, Microsoft is at risk of following this path, due to the corporate delusion that goes by many names: “better together,” “unified platform,” and “integrated software.” There is false hope in Redmond that these outmoded approaches to software integration will attract and keep international markets, governments, academics, and most importantly, innovators, safely within the Microsoft sphere of influence. But they won’t.

Exciting new networked applications are being written. Time is not standing still. Microsoft must survive and prosper by learning from the open source software movement and by borrowing from and improving its techniques. Open source software is as large and powerful a wave as the Internet was, and is rapidly accreting into a legitimate alternative to Windows. It can and should be harnessed. To avoid dire consequences, Microsoft should favor an approach that tolerates and embraces the diversity of the open source approach, especially when network-based integration is involved. There are many clever and motivated people out there, who have many different reasons to avoid buying directly into a Microsoft proprietary stack. Microsoft must employ diplomacy to woo these accounts; stubborn insistence will be both counterproductive and ineffective. Microsoft cannot prosper during the open source wave as an island, with a defenses built out of litigation and proprietary protocols.

I think it’s taken many years, but it does feel like Microsoft is starting to actually do just this.

I have often wondered why they don’t open up their free software to public as open source or shared source. I’d start with the web technologies Internet Explorer, Messenger, and all the Live services applications.