The Left bloc asserted its influence on the ruling UPA government on several high profile issues throughout 2006-07. The SEZ policy, airport privatization, PF re-investment, the presidential election made headlines; what did not, but could have equal or far-reaching implications for governance in this country was Left spokesman Sitaram Yechurys advice to the Center to shift to free and open source software in all its e-Governance applications.

Like most issues advocated by the Left, the jury is still out on determining the merits of this one. However, even if the advice is partially heeded, it could significantly change the OS landscape, increasing the proliferation of Linux distros (not just Red Hat, but even SuSe or Mandriva) and cutting into the Windows dominance. It seems to have already made some impact in 2006-07; though Windows accounted for 47% of the Indian systems software market, Linux also finished with a creditable 21% share.

Windows Still King
But wild celebrations in the Linux camp would be premature. Windows leads the show, and its share during the year was more than double of all Linux strains put together. In fact, FY 07 was a landmark year for Microsoft in India, particularly on the Windows front; the Vista launch and its quick success brought back some of the heady days of 1995. The reactions differed though: back then, Indias potential was acknowledged but it was still peripheral to Redmonds overall vision. Today, the Indian story is keenly tracked by the top brass.

Since the enterprise launch in November, business adoption for Windows Vista has already crossed over 600,000 licenses across EPG (Enterprise Partners Group) and SMSP (Small and Mid-Market Solution & Partners). And this does not include OEM shipments. The magnitude of Vistas reach was truly phenomenal, and by end 2006-07, there were over 43,000 drivers and 1.9 mn devices compatible with Vista.

The euphoria over Vista did not mean that the earlier versions (especially XP) were extinct. Windows maintained its ubiquity across client PCs in homes, SOHOs, SMBs, and enterprises. But piracy remained its biggest bugbear. The BSA-IDC study put the level of software piracy in India at 71% during the year (down one point from the previous year). As a result, the industry as a whole lost nearly $1.3 bn in 2006 (compared to over $500 mn in 2005). Windows bore the major brunt of this.

And Linux, heading toward the mainstream, posed another challenge to Windows domination. And the battle lines were drawn. Microsoft commissioned Frost & Sullivan to undertake a TCO study of Windows and Linux. The methodology was audited by Capgemini, and the results released in Aug 2006. The TCO evaluation took into account both capex and opex; the initial costs (capex) for the Linux operating system might have been low, but opex was significantly higher than for Windows 2003.

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