The inevitable death of the ecosystem

Ever since James F Moore’s 1993 article in the Harvard Business Review it’s been fashionable to talk about business ecosystems. A good example is the Microsoft ecosystem. Microsoft is the shark and third party tools are the pilot fish that eat Microsoft’s leftovers.

This analogy is wrong. Microsoft isn’t the shark – it’s a greedy fisherman. With one hand it throws bread crumbs to encourage the little fishes to grow while with the other it trawls the bottom of the ocean for fish large enough to eat. It catches the fish, but its nets scrape the ocean floor bare, ruining the ecosystem for decades to come.

Microsoft have abandoned their benign tending of the ecosystem. They have moved from helping it flourish to harvesting it. You can see this in many areas. In the developer tools market, rather than providing a set of core development tools they’ve decided to try to flog us bug tracking, source control, unit testing, load testing, enterprise modelling and collaboration suites. These were markets already well served by good, affordable third party tools. For the sake of a few thousand dollars per seat off enterprise customers too lazy or scared to investigate the other possibilities, Microsoft have shut down that part of the ecosystem.

In SQL Server, Microsoft are open about this, at least in private. Senior people in the SQL Server team have always made it clear to me that they want to put everything any SQL developer or DBA could ever want in the box. This will inevitably shut down the SQL Server ecosystem too.

Red Gate – the company I work for – is in a better situation than most. We’ve been going a while, we’re profitable, our revenues are growing and the people who work here are outstanding. Microsoft’s intentions, however, are clear: they want to own the entire SQL Server ecosystem. Anybody left standing in 5 years time will be there despite Microsoft’s efforts, not because of them. Although some companies – Red Gate among them – will survive the cull, many won’t. I do not envy the fragile companies in this market.

Microsoft’s actions are as futile as they are frustrating. They will trawl with their nets, destroy the ecosystem but reap little for themselves. Business intelligence, gaming, mobile phones, business accounting, CRM, development tools and SQL Server third party tools are all areas where Microsoft are now competing with their one-time partners. Judging by their current efforts, Microsoft will not win in many -if any – of the areas they are competing in.

The ecosystem won’t be destroyed overnight: it will wither slowly. Third parties will start to leave the ecosystem and they won’t be replaced. When entering new markets, companies will think about joining the Microsoft ecosystem and then won’t. By the time Microsoft realise what is happening it will be too late.