System Software: Windows Still Shines Bright

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.

The study said that hardware is the largest component of TCO of
Indian enterprises; software is just about 15% of capex and 7% of TCO. Windows
2003 environment across enterprises was reported to have nearly 16% lower TCO
than Linux over five-year peiod; and TCO of Linux was greater than that of
Windows across three workloads that accounted for nearly 80% of x86 server
workload; applications, networking and e-mail.

Linux Grabs Some Turf

Though Linux has been threatening to usurp some of Windows turf for a few
years now, during 2006-07 the challenge intensified with the Linux market itself
crossing Rs 200 crore. The giant was undoubtedly Red Hat with a share of 88%,
with the rest of the pie contributed by Novell (with SuSe Linux), and other
small distributors like Ubuntu, Mandriva, Debian, PC LinuxOS, and Knoppix.

The government also chose the year to proactively start moving
from Unix to Linux. Naturally, the Linux thrust came more on the server side,
with many CIOs trying out Linux-based servers for reliability and security. And,
for once, the Left parties followed in action what they preached. Both Kerala
and West Bengal governments adopted Linux to accelerate their e-Gov initiatives.

With developers rallying behind Linux, Sun Microsystems revamped
its Solaris operating system by incorporating key pieces of Linux into it. This
move was aimed at re-establishing Solaris as a favorite with developers. The
Solaris code was open-sourced for "open high availability clusters" to
further Suns open-source strategy that could increase market share, sales,
and its influence among open source developers.

The Mobile Play

During the year, Microsoft India launched Windows Mobile, in alliance with
Bharti. By year-end, Windows Mobile had crossed the 200,000-unit mark. The
solution was available on the widest portfolio of smart phones available in
India with close to 30 models to choose from Microsoft device partners like HP,
iMate, O2, and HTC/Dopod. Windows Mobile was the numero uno player in the
messaging space in India with a 30.5% share of high-end smartphones in the JFM
quarter far ahead of Blackberrys 19.1% share.

Rajneesh De

rajneeshd@cybermedia.co.in