In an ominous sign for Microsoft's growth prospects in emerging regions, countries that represent the world's fastest growing tech markets voted against accepting the company's latest Microsoft Office document format as an international standard.
Brazil, India, and China, which together count for more than a third of the world's population, all voted against Office Open XML in voting last week before the International Organization for Standardization (ISO). Russia was the only member of the so-called BRIC nations to vote in favor of ISO ratification for OOXML.
"These are areas where open source has more strength and more advocates," said Gartner analyst Michael Silver in an interview.
Seventy-five percent of ISO member nations voted in favor of making OOXML an ISO standard -- meaning that the format has won the standards body's imprimatur, barring a successful appeal by opponents.
But the list of large country's that voted against OOXML also includes Canada, Iran, South Africa and Venezuela. The United States voted in favor of the format, which is used in Microsoft's Office 2007 programs.
Developing nations like China, India, and Brazil are expected to account for the bulk of tech spending growth in the coming years. The fact that those countries rejected OOXML as a standard should be troubling for Microsoft, Silver said.
"Microsoft has long been trying to figure out the best ways to get into these countries, but those are areas where users are looking for more open source and free products," said Silver.
Silver said the market share for the Linux operating system and applications that use the Open Document Format is small but growing fast in emerging markets, where consumers and businesses lack large technology budgets. "They're much more price sensitive and don't have a pre-existing installed base that locks them into commercial products," said Silver.
Gartner estimates that the market share for desktop Linux is about 2% in the Asia-Pacific region, 4.5% in Eastern Europe, and 4% in the Middle East and Africa. By contrast, Linux holds 1.2% of the desktop market in the U.S.
Microsoft's apparent victory before the ISO could be subject to appeal.
ISO approval of OOXML comes amid widespread allegations that Microsoft improperly tried to influence voting and the EU is investigating the process.
The chairman of a Norwegian technology committee tasked with studying OOXML earlier this week filed a protest against his country's decision to approve the format. Questions have also been raised about the voting process in Germany, Croatia, and several other countries.
Microsoft last year conceded that an employee in Sweden offered to compensate local tech execs for joining the country's standards committee and voting in favor of OOXML.
The stakes are high. OOXML is the default file format for Microsoft Office 2007 applications, including Word, PowerPoint, and Excel. The ISO recognition of OOXML could open the door to lucrative government, non-profit and educational markets for Office 2007.
Critics have argued that Microsoft has failed to publish sufficient documentation about OOXML for it to be considered a truly open standard.
ISO member nations last year rejected Microsoft's initial request for OOXML approval. National bodies last week wrapped up voting on the company's follow-up request.