Interesting. The dinosaur that is M$ seems intent on guaranteeing extinction rather than risking survival. By becoming a bottleneck that the world loves to hate, M$ will increase competition, its nemesis. This behaviour is probably good for everyone in the long run. In the short run, the downturn will provoke businesses like Cisco to follow the growth wherever it is: emerging markets, Green IT, and lower-cost solutions.

In the past, M$ has embraced technology only to kill competitors, former partners, in particular fields. This gave them more of the pie. Cutting out resellers is the last stage of that. There are very few partners left except the hardware guys and hardware is so competitive the hardware guys do not want M$ holding them back any longer. ASUS, HP, Dell, and everybody making netbooks has exhibited a greater degree of independence from M$ in the past year. Next year should be even better.

Competition is good. We have about the right level in hardware. No one is starving and customers get great value for the dollar. In software it is a mixed bag. Some are paying through the nose for a decade-old solution that was obsolete when introduced. Startups are not locked-in to that. Paying several times over for software is becoming a tired business model. Free software should keep growing for many years. This will stimulate competition in software so that similar benefits to the world that we see in hardware should develop. It means M$ and its partners will have to rethink relationships.

As for Asterisk, it’s not really in keeping with Cisco’s enterprise-strength pitch — it doesn’t scale very well beyond small businesses — though I believe some people of hacked Asterisk onto Linksys boxes if that counts?

I don’t see why Cisco can’t maintain good relations with both proprietary and open source vendors, so long as they are not called ‘Microsoft’.

In terms of SaaS providers, many of them do use Cisco networking equipment — but blades are typically too pricey for SaaS companies, who prefer 1U and 2U servers in a cluster.

In my opinion, Cisco’s SaaS fate lies with the channel, both in apps and hardware sales. Microsoft Online has all but cut out MS resellers, who are furious that MS will host its own software and own the customer relationship. This leaves only Cisco Webex and Unison are pledged to deliver unified communications primarily via the channel.

There are lots of forces making this the time for thin clients. Those clients need reliable redundant servers. Cisco could cash in on its rep for reliable networking, the Green movement in IT (less power, heat, noise, maintenance, material, waste), the need to fill the vacuum left by Vista and the current need to tighten belts. Improved performance while cutting costs and simplifying administration should make this easier to sell now than ever before.