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Microsoft Acknowledges Linux Threat To Windows
angry tapir sends along coverage from Good Gear Guide of a recent Microsoft !0-K SEC filing: "Microsoft for the first time has named Linux distributors Red Hat and Canonical as competitors to its Windows client business in its annual filing to the US Securities and Exchange Commission. The move is an acknowledgment of the first viable competition from Linux to Microsoft's Windows client business, due mainly to the use of Linux on netbooks, which are rising in prominence as alternatives to full-sized notebooks. ... 'Client faces strong competition from well-established companies with differing approaches to the PC market,' Microsoft said in the filing. 'Competing commercial software products, including variants of Unix, are supplied by competitors such as Apple, Canonical, and Red Hat.'"
A throwaway line in a 10-K report which nobody reads or takes seriously is given a front page news story on slashdot??
Are you guys really this desperate to drum up the anti-Microsoft pagehits?
This isn't an acknowledgement of Linux, its something to use as ammo to prove that they don't have a monopoly. Don't get the warm fuzzies over Microsoft acknowledging Linux because its just marketing and politics.
I always wondered where this setting was...
It's not just posturing for the SEC this time. Talked to one of our vendors back east this afternoon and his mom liked his netbook so much he bought her one, then his dad wanted one, then another one for his step-mom. That's bad news for Microsoft for two reasons: One, Linux really is competitive on low-end hardware. The combination of Linux, Gmail, GoogleDocs and online services gives netbooks functionality that makes the OS less significant.
And, two, Microsoft can't demand their normal margin on a netbook OS. The cost of the unit is so low MS is forced to price their product lower. That's hurting revenues and that trend will only continue to accelerate. Windows 7 will run on netbooks, but not particularly well. Windows Mobile isn't going to gain them any market share and they can't sell XP on netbooks indefinitely.
The netbook trend caught MS flat-footed and they threw XP at it to fill the gap while they scramble around to try and find a solution. But there isn't one this time. Microsoft built their market at the top end of the scale, not in the appliance market. Their software isn't made to run on low-end hardware, they have no appliance market strategy.
This time, I think they're entirely justified of being afraid of Linux.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Apart from the obvious "Linux is a threat to us and therefore we are not a monopoly" I think Microsoft may very well percieve Linux as a threat to them, but for slightly less obvious reasons.
The major reason that Linux is a threat to Microsoft is that it is (usually) free, and nobody can compete with free in the long run. Given enough time, Linux would eventually conquer the desktop. But it would be decades, if not centuries. If nothing else, Linux's small presence on the market means that Microsoft cannot raise it's prices too much, or people will start seriously looking at the alternatives. And if they discover the alternatives are good enough (or better then Windows) for no money (or very little money) the game will be up for Microsoft.
There is a more threatening aspect of Linux though. It is not one that matters every day, but in the long run Microsoft must deal with the fact that a lot of "Linux" is a community. A community of users and developers spread around the globe cannot be purchased and shut down as if it were a competing company. Suppose Microsoft purchased Cannonical and shut it down. They have not really gained anything, since they can't stop the individual developers from continuing their work, even if it is in their spare time.
Even if Microsoft started buying all companies that released a Linux distro, they cannot win: once it becomes obvious that to become a millionaire you just have to release a Linux distro, new distros will be popping up so fast that rabbits will reproduce slowly, by comparison.
I think the only way for Microsoft to keep "winning the game" against Linux is to constantly produce better and better software for lower and lower prices. Since Linux's market share seems to be growing, Microsoft is already under pressure to not raise their prices too high, and this pressure will increase several times over with increasing market share for Linux.