More and more I think about Microsoft. How they flew from dastardly to discounted! The other day Gates leaked a memo about a "sea change" needed at Microsoft to--truly, finally--grapple with the internet. Now everyone talks of Google. A few people even talk about Yahoo. Nobody talks about Microsoft. Somehow it took me a few tries to clarify for myself why this happened. Microsoft's business model counts on selling software. Open source software has offered decent replacements for pretty much every Microsoft offering for some time now. I think we software people talk a lot during the innovative period, but we get bored when the products move out into sales. Look closely at how few recent Slashdot posts describe new open source software, or even new releases of old open source projects. The innovation thrill may be gone, but the business impact is just beginning. Microsoft found a model that worked, and like most companies, ran with it. What I have come to realize is that software products, like everything else, commoditize. The sharper minds at Microsoft realize this, but to abuse Adlai Stevenson's line, I'm not sure that's enough. Some debate has broken out about whether Microsoft can make as much money via ads as they make (made) selling software. This strikes me as missing the point. Microsoft can't put the ad-funded genie back in the bottle and demand everyone keep paying their price. Companies who figure out how to make open source work for them will be lower cost companies. Lower cost companies have a nasty habit of beating higher cost companies. So either way Microsoft gets to learn to live with lower profits. The only thing that never becomes a commodity is an innovation. Who generates innovations steadily these days and who doesn't?