Should Microsoft Fear Linux?

"Linux is a cancer that attaches itself in an intellectual property sense to everything it touches" said Steve Ballmer, CEO of Microsoft in a media interview with Chicago Sun-Times. What plague of the penguin is this to conquer first the server market and, now, make its mark on netbooks?

Let's see from Bloomberg:

The devices, which usually cost less than $500, are the fastest-growing segment of the personal-computer industry -- a trend that's eating into Microsoft's revenue.

Asustek, based in Taipei, introduced the Eee PC in October 2007, igniting the netbook market. The company, which at first just offered Linux, later added an XP version.

The Eee PC prompted companies such as Acer, the world's third-largest computer vendor, to develop similar products. Taipei-based Acer's AspireOne, available with Linux or XP, became the best-selling netbook model during the third quarter, President Gianfranco Lanci said last month at an investors' conference in Taipei.

Hewlett-Packard, Dell Follow

Linux, equipped in 30 percent to 40 percent of Eee PCs sold, will probably sustain a market share of about 30 percent, said Samson Hu, a general manager at Asustek. The company estimates it will ship at least 5 million Eee PCs in 2008 after selling about 4 million since the product's debut.

Acer, which is aiming to sell 5 million to 6 million AspireOne laptops this year, estimates that Linux-equipped models account for about 20 percent of its shipments, spokesman Henry Wang said.

Disturbing for the giant? Yes, it is. Microsoft's fear is not Linux increasing market share. Nor it is some 30-40% share of the netbook market. It is that people are seeing there is an alternative, something else that they can try. The equation is not computers = Windows and longer. There is a whole different world outside. Make this our point one.

How about this from Infoworld?

A nine-way test scenario, involving three concurrent instances of each workload object, turned in nearly identical average transaction times under Windows 7 M3 and Windows Vista. In fact, the scores were so close -- less than a 5 percent delta (in favor of Vista) on the database tasks, and a roughly 2 percent delta (in favor of Windows 7) on the workflow tasks -- that they fell within what I'd typically consider the margin of error for this sort of test.

...

In a nutshell, Windows 7 M3 is a virtual twin of Vista when it comes to performance... From a raw throughput perspective, Windows 7 promises to perform as poorly as its predecessor. "Pre-beta" notwithstanding, the reality is that any hope for closing of the performance gap with Windows XP is unlikely to materialize in Windows 7.

Make this our point two.

From Mac News World:

"Microsoft fitting Windows XP or Windows 7 onto a netbook is not a strategy but a reaction. Microsoft has to answer consumer demands to keep XP alive. Vista doesn't work on netbooks," said LF's Carr.

Please also check out articles from Practical Tech and Infoworld and make this our point three.

I think all of the points above do not need much explanation. Microsoft lost blood with Vista. Now they are working on its successor, but it seems that the successor will not be able to succeed. This, as you might think, will not happen overnight; we will not wake up one day and see that all of our computers are running Linux. People, whether individuals or companies, will see that they are paying the software giant just for shiny interfaces and nothing more. What they receive and what they pay for are not in balance. If you purchase a computer for as low as US $500, and it is US $150 for the operating system, US $150 for Office, and another US $150 is for maintenance and you can get all these for free, it is not likely to me that Microsoft will be able to compete in the long term (except for our point three).

Does Microsoft have reasons to fear the "penguin plague"? Yes it does. Plenty. In the short term? No. In the mid term? Maybe. In the long term? Yes.