Ray Ozzie says open source is a bigger threat to Microsoft than Google. That's according to Mary Jo Foley, who discusses Ozzie's presentation at a conference this week.

Google, said Ozzie, while a strong competitor, still has shareholders to answer to. Open source, on the other hand, has programmers not beholden to shareholders.

I think Ozzie is wrong on the facts, but right on the conclusion.

It's not that open source programmers aren't beholden to shareholders (I think he was thinking that they are "community" developers working on their own time). Most open source programmers work for companies with shareholders. It's just that their employment, typically, is not as programmers employed to create software distributed under a proprietary license. Their employment is to work on a product that is not treated as a product for sale. And that's where open source's threat to Microsoft lies.

Open source is literally playing in a different game than Microsoft and, as such, is immune to the usual danger experienced by products distributed by Microsoft competitors.

In the military, this is known as "asymmetric warfare" and refers to military conflict in which the two parties fight in different ways. For military powers, this type of warfare can be the most difficult and frustrating, with no possibility of victory as defined by the incumbent power. For Microsoft, this means that open source can't be defeated like all its commercial predecessors, mowed down by the power of monopoly.

So Ozzie is right that open source poses an enormous threat to the company. But I think he's wrong about Google. Google is also fighting an asymmetric conflict with Microsoft; however, this fight is not between a powerful conventional force and a ragtag open source mob. This conflict is between two powerful conventional forces -- one the champion of the traditional packaged software industry and the other the champion of the web industry.

Google, fueled by its quasi-monopoly in paid search (perhaps even more lucrative than Microsoft's, if that can be believed), can afford to give away free good-enough versions of applications Microsoft has harvested and eat away at its dominance -- because its revenue stream is not threatened by free applications.

Microsoft, on the other hand, is an also-ran in the web. Why else are they so desperate to buy Yahoo? Unless they can somehow blunt Google's lead on the Web, the end is foreseeable. It's like a chess match that, long before mate, one can see how the game will end.