Industry pundits roll their eyes when Bill Gates says that IBM, not Linux (or Google), is Microsoft's biggest competitive threat. Those pundits assume Bill is being disingenuous or diversionary with such statements. But I think he's not. Open source in itself doesn't endanger Windows' march toward being the predominant business-computing platform. Rather, the danger lies in the potential availability of a standardized stack of integrated and easy-to-manage open source core applications emulating the Windows Server System (WSS) family—and IBM is the purveyor of integrated open source solutions.

At least since the late 1980s and the AS/400 platform, IBM has understood the power of a unified platform that seamlessly integrates essential applications (e.g., database, networking, and messaging) and reliably serves end users' needs while—most significantly—simplifying development and operations. Today, IBM's business thrives on deploying its skilled and knowledgeable services division to bring such unification and integration to the diversity of Linux offerings. By spreading open source skills to IT organizations, IBM is an ever-present reminder of the need to keep a competitive edge by further integrating the WSS application stack and continuously simplifying and unifying the management experience throughout the stack.

Microsoft is addressing this threat by incorporating IT knowledge and skills into its products while simplifying management of a better-integrated Windows stack. A company wide strategy focuses on the complete life cycle of application development, IT operations, and end-user productivity. The elements of this strategy are the .NET Framework, the Dynamic Systems Initiative (DSI), Trustworthy Computing, and the Digital Workstyle for the New World of Work.

The piece of this strategy that directly speaks to capturing Windows platform skills and making them widely available is DSI, with its promise to "radically simplify IT" by reducing complexity and total cost of ownership (TCO), thus evolving IT from cost center to strategic asset. The key to DSI is expressing systems and IT knowledge and policy as models that connect the requirements of developers, IT pros, and end users. The goal of DSI is to produce self-managing systems by enabling developers to write "operationally aware" applications with Visual Studio (VS) on the "operationally aware" platform of Windows Server (and Virtual Server). Microsoft's System Center management products are the tools that capture IT knowledge and skill and make IT's life easier.

In a recent briefing on DSI, Eric Berg, a director of product management in Microsoft's Windows Enterprise Management Division (WEMD), told me, "The key with DSI is thinking about all of the information and knowledge about the application that resides in the heads of customers. Take a typical distributed application: Our customers have a lot of knowledge about the complexity of that application and the interdependencies of the application's components. Administrators are deeply steeped in the black magic of running their applications and maintaining them. So how do we take the knowledge, capture it in the software, and let the software automate it? We're capturing that knowledge in software models. A consistent theme is to make sure that everything we're doing includes not only operations or not only development, but connects them throughout that life cycle."

Like IBM, Microsoft has always understood the value of a unified and integrated platform. That value was the idea behind the late BackOffice Server bundle (not to mention its descendent Small Business Server—SBS—as well as the upcoming Centro) and also was the reason behind Microsoft's recent messaging about how the WSS products (e.g., Windows client and server, Exchange Server, SQL Server) are "better together." The argument is that you can build a Linux-Apache-MySQL-Perl/PHP/Python (LAMP) stack, but you don't get the optimization and integration that Microsoft's stack provides.