Khaotic Musings
Random musings on Linux and Free and Open Source Software.
Wednesday 18 February 2009, 6:43 AM
Microsoft's biggest threat: Linux
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.
PreviousComments on this post
Excellent points, Conz, and you provide a far more complete picture of Linux's current advantages. Don't forget that as soon as Windows users fork over the cash for Win7, the marketing for Win8 begins and soon they'll be asked to extract more cash from their wallet within two years.
I got off that merry-go-round for good years ago.
Thanks zaine_ridling.
I think we've reached the point with Windows upgrades where customers actually opting to go and buy a Windows product is extremely rare. Most will just get it with their next PC, whether they wanted to or not.
It's this 'automatic', trapped market, which is Microsoft's biggest ace.
Unless governments, most likely in Europe, take the steps to liberalise the PC OS market, Microsoft wins regardless of how good the competition is. I wrote about this in the essay Why the Unbundling Windows Sceptics are Wrong a while back.
Thankfully, the netbook market has different dynamics, and in this market, Linux has shown it can capture 30% of the market. Yet even here, Microsoft is engaged in anti-competitive practices and predatory and opportunistic pricing.`
A great article! Thoughtful and right on the mark. I really liked your observation on how Linux has made so many things possible. This includes getting MS off its duff and having to worry about its customers again.
There is only one thing I would add to all of this and that is the community aspect of Linux. It is not just the software, its also the people. Its people helping people and not asking for very much back. It's not about the cash. Hard as it is to believe there are people writing Linux code for free. There are others writing documentation, while others test the distros to help make them better. They get little in the way of recognition but they do it anyway. Like Gandhi, that is pretty hard to compete with. Empires don't usually fall right away, they erode slowly.
So while many make fun of the Linux idealists, this idealism is having a tremendous impact in so many ways as you so intelligently point out. Thanks for a great piece.
Sorry, no. I've sat through too many LUG meetings watching people install FreeBSD on their pre-Lenovo Thinkpads, spent too many hours on someone's Solaris machine and had too much fun with Debian Hurd (while doing serious work on Debian GNU/Linux) and talked to too many Cisco and Google employees to be willing to accept that Google is identified with anything more specific than choice and the avoidance of vendor-lockin.
Your second point, about netbooks, also strikes me as wrong for the same reason. Your last two points may be linux-specific, since Shuttleworth and others are definitely selling Linux as an alternative and I can't think of anyone who is able to do the same thing with Unix, but Unix is not dead, thank heaven.
I don't believe in a BETTER OS (except for a specific purpose) but if you had talked about choice and posix-compatible OSes then I would have an easier time with this essay. Choice goes beyond what Stallman says, though I respect him. I can't accept Linux in and of itself as being the deal-breaker which Microsoft (notoriously extremist in their views of software) claims. Prolonged use of Linux and other posix-compatible systems is going to change your idea of what an Operating System is, and if you don't stay wedded to one or another (I don't use Mac OS X except for heavy graphics which I occasionally have to do since my paste-ups in the eighties were barely adequate and sometimes not even that but computers have changed things. What IS wrong with it? Many of the proprietary standards which it and Adobe use date back to the thirties or earlier and the Open Source people seem as bad as Microsoft when it comes to wanting to impose new and more expensive ways of doing things) you will have considerably more freedom and be more productive at a lower cost.
This comment has been deleted at the users request
Hi jplatt39.
I can't say I understand some of your points. For instance:
"Sorry, no. I've sat through too many LUG meetings watching people install FreeBSD on their pre-Lenovo Thinkpads, spent too many hours on someone's Solaris machine and had too much fun with Debian Hurd (while doing serious work on Debian GNU/Linux) and talked to too many Cisco and Google employees to be willing to accept that Google is identified with anything more specific than choice and the avoidance of vendor-lockin."
My point #1 was that Google built its business upon Linux and Free software. This made it strongly dependent on Linux and Free software, and without these, it couldn't have become the competitor to Microsoft that it became.
And as Google is now a major competitor to Microsoft, this makes Linux and Free software the *enablers* of competitors to Microsoft, such as Google.
Which in turn, means that it's Linux which is the serious threat to Microsoft, as such an enabler.
Can you elaborate further on your points above, and how they relate to this thesis?
jplatt39,
I'm not sure I follow your other arguments, either. You say:
"Your second point, about netbooks, also strikes me as wrong for the same reason. Your last two points may be linux-specific, since Shuttleworth and others are definitely selling Linux as an alternative and I can't think of anyone who is able to do the same thing with Unix, but Unix is not dead, thank heaven."
We're only talking about Linux here, and how it actually *is* Microsoft's biggest competitor.
Also, you state:
"I don't believe in a BETTER OS .'
You are correct; there is no such thing as a 'better OS', there is only a better OS for a particular purpose, for a particular user; but then, this issue isn't raised in the blog-posting, so I'm not sure why you're rebutting it.
