Microsoft must embrace open-source software or face oblivion, wrote retiring Microsoft executive David Stutz in his farewell letter to the company.

His assertion reflects the move to open source Apple has already taken. That company is embracing open source, to the extent that its recently released Web browser, Safari, is built on the open-source KHTML-rendering engine.

A respected technical thinker at Microsoft, Stutz sees networked software as the future for computing. Open source software is already there, while Microsoft still has to move past its PC-centric roots, he wrote.

"If Microsoft is unable to innovate quickly enough, or to adapt to embrace network-based integration, the threat that it faces is the erosion of the economic value of software being caused by the open-source software movement," Stutz wrote in the letter that he posted on his Web site.

"Useful software written above the level of the single device will command high margins for a long time to come. Stop looking over your shoulder and invent something!" he wrote to Microsoft. He added: "If the PC is all that the future holds, then growth prospects are bleak."

Stutz left Microsoft earlier this month. He held several key positions at the Redmond, Washington, vendor including chief architect for Visual Basic, and most recently group program manager for Microsoft's Shared Source program, the company's answer to open-source.

"David Stutz has been an important contributor to Microsoft's open-source thinking and Microsoft agrees with much of the vision Dave has for the future," the company said. However, Microsoft added it believes that "breakthrough innovations will come mostly from commercial software companies such as Microsoft".

Stutz worries that efforts to recover from current poor perceptions of the company as "politically inept", among other things, and a focus on being the lowest-cost commodity software producer will lead to rule by managers and accountants at Microsoft, rather than visionaries.

Microsoft's "denial" when it comes to networked computing is understandable, because the company built its empire on the notion of the PC as the natural point for hardware and application integration. However, "network protocols have turned out to be a far better fit for this middleman role", according to Stutz.