Microsoft's biggest threat: Linux
I get to hear about the biggest threat to Microsoft's hegemony and market dominance quite a bit. It often goes something like this: "Linux isn't Microsoft's biggest threat, Google is."
Alternatively, as raised recently by ZDNet blogger Adrian Kingsley-Hughes:
"The biggest threat to Microsoft’s bottom line isn’t Mac or Linux -
it’s netbooks!"
Adrian continues:
"The problem isn’t that netbooks are cannibalizing Windows sales
(they aren’t, especially when you take into account that
Windows-powered netbooks out-sell Linux models by a significant
margin), the problem is down to the fact that Moore’s Law has finally
caught up with Microsoft and the OS is rapidly becoming one of the most
expensive components of a new PC. And as hardware prices continue to
fall (which they will), this is only going to get worse for Microsoft."
It seems that Microsoft's margins are being squeezed because netbooks
are on the scene, and netbook prices are plummeting, putting further margin pressure on Microsoft.
Now, here are some questions about these supposedly major-domo
competitors to Microsoft, and I'm sure, that you can easily guess the
answers:
1) What was it that made Google such a serious net platform player,
with enough power and flexibility to serve the world's Internet needs?
2) What was it that made netbooks possible in the first place?
3) What gives netbook manufacturers enough leverage to screw Microsoft down on OEM licence costs?
4) What is it that makes products like Amazon's Kindle and hundreds of
other e-book, portable media and mobile Internet gadgets possible, all
by eschewing Microsoft's embedded OSes?
The answer of course, is Linux.
Without Linux, there would be no Google. No startup could afford to
build a platform on hundreds of thousands of servers which required
either proprietary hardware (ie, Sun servers, circa 1998) or proprietary
system software (ie, Microsoft's Windows Server.) Further, how
comfortable would Google be in competing with Microsoft in the Internet
space, if Microsoft 'owned' its server platform, the basis of Google's
ongoing business?
Without Linux as a viable desktop play, Asus could never have produced the Eee PC 701. No Linux. No netbook market.
Furthermore, without the presence and ongoing viability of desktop
Linux for small form-factor devices (eg, Eeebuntu, Android), there's no
way that Microsoft would have done an about-face on scuttling XP in
2008, nor could they have been beaten down on OEM licence costs. In
fact, the sheer presence and viability of Linux puts an upper limit on
how much Microsoft dares charge for Windows 7 OEM licences for these
netbooks.
And once ARM-based netbooks start selling for under US$200, removing
any "breathing space" for OEM licences fees at all, watch Microsoft get
squeezed out of this market in a big way. As an aside, Microsoft's key
OSes and the 'Windows software ecosystem" don't run on non-x86 CPUs
like the ARM; the Linux ecosystem does, and has for many years. (I
remember being involved in a project to build a Linux-based web-tablet,
on an ARM platform, in 2000.)
So, everytime I hear pundits say that something-or-other-besides-Linux
and open source is the "real threat" to Microsoft, I reach for my
clue-bat.
And now you know why.
