Penguin on Steroids

For years, the tiger thought itself safe from the penguin’s flailing beak.
"No sweat," was Bill Gates’ serenade to a Windows-saturated world.
The world’s largest software company reacted to the Linux challenge by playing
the market deftly, if nonchalantly, leveraging the formidable mindshare its
legendary Windows series of operating systems enjoyed at the center of the
corporate server and home-user network to launch a series of attacks on Linux.

But many anti-trust battles, Linux counter-attacks, and several hundred
curses courtesy the organised open source establishment later, Microsoft’s
belated act of acknowledgement that Linux has seriously undermined its market
share-meaning, reduced revenues from sales, shrunk operating margins and
possible price cuts-is not just about raw courage and honesty in the face of
the Linux-bite. It also marks the first, though reluctant, doff of the hat to
the growing power of the penguin, as the company admits that Linux is more of a
threat today than it was a year ago.

filing with the US Securities and Exchange Commision this month concedes that
its share of server units on an absolute basis grew modestly in fiscal 2003-04,
while those for Linux distributions rose slightly faster. And, while PC unit
growth was very strong in fiscal 2003-04, increasing approximately 13% from
fiscal 2002-03, Microsoft does not expect similar growth to occur in fiscal
2004-05. Watching the growth of the open source movement spearheaded by the
likes of Linux and MySQL in recent years, Microsoft’s trepidation has been
stoked by the Linux programs initiated by rivals like Hewlett-Packard, IBM and
Sun, which now also offers Linux on its desktops too.

Linux Boosters
Linux’s growth has been aided by the wonder drugs pumped by Microsoft’s
rivals since the 1990s. Linux has the advantage of being able to run on a
variety of hardware platforms including x86, Itanium, Alpha, PowerPC and IBM’s
entire product line. Being comparatively hassle-free for the server
administration, Linux has been widely used in servers and is slowly gaining
ground in the desktop market. Linux distribution with paid technical support
from vendors like Red Hat, the SCO Group, and SuSE Inc has grown. In 2003, Red
Hat alone sold over one million units of its Linux OS system. Obviously,
Microsoft’s argument that the services component in Linux can prove expensive
for the concerns adopting it will not deter the free-loaders, or even those
willing to pay for service. In fact, Microsoft continues to play catch-up on key
Linux features: for instance, take the Longhorn OS due in 2006, which envisages
partitioning of storage, login and I/O mechanisms. The above features are
already available in SE Linux, say experts. Red Hat-sponsored SE Linux is a
zero-cost, free extension, and can be compiled for any version of Linux, but
currently ships with Fedora Linux Core II.

The Unix Injection
Another steroid boost for Linux is its source code affinity with Unix, which
makes it an easy replacement for Windows in the data-center. In combination with
Intel economics, the Unix-Linux combo has now proved a toxic sandwich for
Microsoft. Further, the companies that distribute widely used Unix versions are
its fiercest rivals Sun (Solaris), HP (HP-UX) and IBM (AIX), not to mention SCO’s
popular UnixWare. Even Apple’s Mac OS X is based on Unix, and IBM mainframes
are Unix compliant, after the Unix interface was added to MVS and OS/390.
Linux’s enormous popularity derives from its relatively lower ownership costs,
prohibitive for Microsoft products, and the stable open source functionalities
that come at throwaway prices if not free.

Microsoft’s lengthy list of disparagements against Linux has included,
among a million other insinuations, noises about the latter’s
user-unfriendliness, lack of trained IT staff to manage Linux deployments,
paucity of maintenance support, and its technogeeky, elitist image.

But like it or not, Microsoft Office is still the most successful application
suite in history. The company clocked over $5 billion in hardware sales last
year. And, how can we forget Microsoft’s thriving business in programming
languages, where its roots are, as well as in numerous other software
categories? All said and done, these make Bill’s chronic Linux phobia seem
juvenile in comparison.

Ravi Menon in Bangalore

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