Linux's Role In Microsoft's Decline 532
nerdyH writes "As early as last quarter, Microsoft admitted that Linux and netbooks were eating into its fat profits. Recently, it came home, with the software giant announcing its first-ever layoffs. LinuxDevices interviewed Linux Foundation Director Jim Zemlin on Linux's role in Microsoft's misfortunes. Zemlin sums it up pretty well: 'Companies can offer their own branded software platform based on Linux. If Microsoft is getting 75 percent margins, you would like some of that high-margin business, too.'"
Comment removed (Score:5, Interesting)
Linux renaissance by Laid-off MS employees (Score:4, Interesting)
Making $4 Billion in one quarter isn't much a decline. Looks like layoffs were induced by greed, so that executives stocks options go up. It would be interesting to see if some of those 4000-5000 employees use linux as a platform for a technology startup.
On the bright side if I were laid-off I'd have plenty of time to juggle [youtube.com].
Re:Oh, Dear (Score:3, Interesting)
Re:Missing factors (Score:5, Interesting)
Re:Would be Nice for Independant View (Score:3, Interesting)
The article cited the ODF fiasco, which indicates their degree of dependence on the Office revenue stream. The mere existence of Open Office, Google Docs and the like gives people a valid alternative - and wakes them up the fact that they have a choice as to whether they want to be held hostage to proprietary data formats.
MS doesn't innovate, they copy, then leverage their market share...and the market responded.
Re:Oh, Dear (Score:3, Interesting)
That was my first thought also. If it's all Linux, why did IBM announce massive layoffs in the same time frame?
What if... (Score:2, Interesting)
Next up, Microsoft Linux!
yeah right (Score:2, Interesting)
instead of boasting you've toppled MS, try going back to fixing the numerous issues with linux software that keep it off the desktop.
Re:Would be Nice for Independant View (Score:3, Interesting)
>> a ZERO COST product
>
> Technically, copying Vista costs the same as copying Ubuntu. Development is already paid for.
What you are describing is a FELONY.
You personally don't get to make extra copies of Windows and sell them.
Although you bring up a good point. As Linux has been rising up as a reasonable
alternative, Microsoft at the same time has been making it more difficult for
casual pirates to copy their OS. This is a real corporate brain fart.
Re:Oh, Dear (Score:1, Interesting)
I'll tell you one thing though. Whatever it is, he's certainly made of different stuff to every other politician in power at the present time.
Re:The theoretical power of Linux (Score:3, Interesting)
In regards to dependancies and app installs, sudo apt-get might be more logical for you than say dragging an application into a folder as you do on the Mac or double-clicking an installer executable on Windows but that doesn't mean its relatable to the average user.
Re:Oh, Dear (Score:5, Interesting)
now that our president is a chimp in a business suit.
I wasn't even in a trollbiting mood, but this just made me laugh.
Eight years of misunderestimating the nukeyoular policies of a man who even looks simian, and you think this president is the chimp?
Re:Oh, Dear (Score:5, Interesting)
Popcorn (Score:1, Interesting)
When movie theaters started to boom in the 1920s, a time of general economic prosperity, the theaters used to rent out space in front of the theaters to sell popcorn. Then, during the depression, the theaters realized they weren't making enough money. They also realized that it's almost free to make their own popcorn, and that you can mark up popcorn by obscene amounts and nobody will say boo. Thus, movie theater concessions were born.
Sometimes it takes an economic downturn to realize that you're getting hosed by renting out space, whether it be on your hard drive, or in front of your movie theater.
Re:Oh, Dear (Score:5, Interesting)
Yeah, it couldn't be because there is a massive economic crisis going on. It's all Linux.
Microsoft is getting beaten down by Apple at the high end and by Linux on the netbook space. Obviously, I don't mean that people are buying linux netbooks. Hold your horses there. But MS's bargaining position has changed because of linux. They could have said in 2002 that netbooks should cost $600, because of the $200 windows copy. But that does not apply anymore. They sell XP for $28-$32. This is a huge relative loss to what they were making.
And at the high end, Apple is all over it. Take a look at bestbuy. It is rare to find a $1000+laptop, Apple notwithstanding. Or take a look at Amazon's best seller list, only to find hordes of netbooks and macbooks, perhaps with a 1 in 20 Vista machine.
To make matters worse (for MS), if these high-end phones and proposed tablets such as the techcrunch one come to life, they won't be using windows. Nothing below $300 can afford windows, even at $32.
Finally, MS's stock price has been walking sideways for years and years and years. They cannot bring the best talent in the basis of money or stock options alone. This is not the year of linux on the desktop. But its presence is being felt in the markets undergoing disruptive innovation [wikipedia.org], like the netbooks.
Re:Oh, Dear (Score:4, Interesting)
that and their reliance on temps. They could close and shuffle offices far bigger than this without a peep. They used to hide "right sizing" in the legions of temps.. but of course now it's better to shed the real employees and keep the temps!
They're just saying this to "look busy" so the stock market will still like them.
Re:netbook argument is nonsense (Score:4, Interesting)
Re:netbook argument is nonsense (Score:4, Interesting)
But how many Vista netbooks do you see? The fact that MS has had to continue to allow companies to us XP in new products is a slap in the face to MS, and really hurts their profits. Microsoft has no choice but to allow XP to be used (and very cheaply) or face those companies moving to Linux.
FreeBSD-based OS is the Future (Score:3, Interesting)
I think Microsoft will still dominate market share until Google makes an OS based on FreeBSD. Until then, Microsoft's biggest competitor is itself because while their software is over-priced, most people just keep reusing their old XP disk rather than trying to learn something new. Linux doesn't have the marketing power required to take on Microsoft no matter how good the software is. I'm not a fortune-teller, but if I were, this would be my prediction.
Re:Oh, Dear (Score:5, Interesting)
Embedded devices and netbooks are going with Linux due to its ability to run lean.
It has been known for at least 20 years that systems-on-a-chip or embedded systems were going to take off - although it has not been until wireless communication and true-color displays have become affordable that this has happened.
For many years, Microsoft could specify the standard of hardware required to run their OS, and the hardware vendors had to obey in order to get compatibility certification.
Linux distro developers did not have that level of influence over the hardware developers and so had to modularize their software in order to adapt to hardware with limited memory and resources.
By not having this evolutionary pressure, Microsoft have really pushed themselves into a very restricted evolution path, and just hope that memory increases enough to run the embedded versions of their OS.
Re:I dunno (Score:3, Interesting)
The big picture (Score:5, Interesting)
Microsoft isn't reporting billion dollar losses.
Microsoft is reporting a bare 2% growth in revenues, to $16.6 billion dollars in its second quarter.
Microsoft is debt free, with tens of billions in liquid reserves and Exxon-Mobil grade corporate credit.
The last I heard, OpenOffiice.org was down to 24 full time developers.
Sun is hurting.
There are others who have made big commitments to Linux and open source who are hurting.
Before the geek crows too loudly about Microsoft's "dilemma" he might usefully rate his own chances of survival.
Re:Linux had a head start (Score:5, Interesting)
Give me an example of what was alternatives that IBM ignored when it chose MS-DOS for the IBM PC. And why they were better (for the target market) than MS-DOS.
I can only think of one OS that was truely better at the time for personal computing, and that was OS-9 (not Mac OS-9)... but I'm not sure that it could have been ported to the Intel 8080 as it was written entirely in assembly and wasn't ported to any other processors until 2 years later in 1983 and not to Intel until 1989.
Sure there were tons of interesting things happening in the personal computing OS space in those days... but when IBM went shopping, there were not really that many choices that would have made good business sense. CP/M would have been the best choice, as it was the most popular... but they wouldn't sign the papers IBM required... hence the reason Gates bought QDOS (a CPM like OS) and renamed it MS-DOS in the first place.
So technically there was nothing for intel processors that was better, and the only os that made better business sense wouldn't sell... that left MS-DOS.
I will agree that MS could have greatly improved on MS-DOS and didn't, favoring compatibility over capability... but don't forget that tons of software of the time was proprietary so it didn't make sense to break compatibility to favor features.
I think if anything, it's IBM's fault for coming into the scene before a decent OS had been ported to intel processors. Hell QNX was only a year later and put DOS to shame... but in technology, it rarely pays to wait.
Re:Oh, Dear (Score:2, Interesting)
What's needed now is a sub $150 netbook that only does the web and light document reading on an architecture like MIPS or ARM. And the more sub $150 the better. Picking an arch like that gets the price and power consumption down and all but MS proofs the machine. Sure MS can make sweet noises about WinCE but WinCE doesn't run J. Random x86 XP application.
The trend in netbooks has been bigger screens, faster procs, and more storage. You basically wind up with a small laptop that uses flash and lacks an optical drive but is otherwise indistinguishable from a low-end laptop and includes price and battery life. I want see things closer to original EEE PC 701 in a blister pack at Walmart with an impulse purchase price on it. And even if a super low price super power efficient x86 comes along so MS can compete in that space then their margins will have to go even lower.
Re:Oh, Dear Warren Buffet was Right (Score:3, Interesting)
After a trip with Gates, Warren was asked if he invested in Microsoft, and he answered something to the effect that he 'didn't understand the long term viability of software as a business model.'
Warren is FAR more understanding of core business issues than techies give him credit.
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new variant on old meme (Score:2, Interesting)
Microsoft is dying. [google.com]
Net Applications confirms it.
I wonder what that search result count will look like over the next two years.
Re:Oh, Dear (Score:5, Interesting)
Hype and marketing.
Real world benchmarks are gradually creeping out and guess what?
"any illusions about Windows 7 somehow being leaner or more efficient than Vista can now be thrown out the window."
Via Engadget [engadget.com]
Re:Oh, Dear (Score:3, Interesting)
You would think Atom rakes in enough profit for Intel to keep them running...
And hey, linux users love their high-performance hardware too. It just happens that there's less high-performance lovers.
Slashdot is retarded (Score:2, Interesting)
Hundreds - literally hundreds - of replies and Slashdot misses the biggest thing that hurts Microsoft's bottom line.
The roaring dollar.
A huge percentage of Microsoft's income is from foreign sales, measured in whatever currency they happen to use.
For example: 1 GBP is $1.38. Not too long ago it was nearly $2, in fact exceeding it. When a British company pays the same this year as last, Microsoft's bottom line falls out. In fact, this is partially why their bottom line was so good last year - the dollar was incredibly cheap.
Frankly, the ignorance, grandstanding and flagrant disregard for reality and economics on Slashdot (OMG, it's LINUX killing Microsoft) makes me want to vomit on some orphans.
Re:Oh, Dear (Score:5, Interesting)
The problem isn't that the version of XP used on netbooks took some time and effort to create. The problem is that netbooks running XP are being sold instead of netbooks running a much more expensive version of Windows.
Even just a few years ago no OEM had that sort of leverage over Microsoft. You either built hardware that worked with existing versions of Windows (with existing cost structures) or you didn't build a device at all. With the netbook Microsoft showed that it was willing to cave on price if the alternative was a PC running Linux.
Sure, the netbook version of XP wasn't expensive to create, but Microsoft's R&D department is essentially a fixed cost. The bit that this particular set of articles missed is that Microsoft's unit sales actually increased by 1% in this last quarter, but revenue on those sales was down 8%. Clearly this is better than losing those sales to Linux, but it still amounts to nearly a 10% price reduction on the sale price of Windows due to competition from Linux.
Now clearly this isn't going to drive Microsoft out of business any time soon, but it certainly worries investors. If future trends see Microsoft selling less software at lower prices then they'll want to see changes made.
Re:Oh, Dear (Score:3, Interesting)
That's an excellent point. Microsoft didn't come out with special pricing until it was clear that the netbook was a runaway hit.
It's also important to note that the Tier 1 OEMs like Dell and HP weren't the slightest bit interested in upsetting the status quo until a relative upstart on the consumer scene showed that there was money to be made. For HP, Dell, and others near the top of the heap the current Windows marketplace suits them just fine. They get the bulk of Microsoft's marketing money. As long as Windows is a sure bet they don't want to rock the boat.
The fact that companies like HP and Dell sell netbooks (and pre-load Linux across their product lines) shows just how far the Linux trend has already progressed.
No new hardware, please (Score:3, Interesting)
I'm no business analyst, but obviously Linux (the netbook market in particular) is severely cutting into the profits of computer giants like Microsoft, Apple, Intel, and IBM. If you needed a sign for the year of Linux, this is it!
Well, I've got a circa-1998 333MHz Pentium II processor with 128 MB of memory running my file server at the house. If it wasn't for Linux, I'd have replaced it a loooong time ago with some of that new fancy-shmancy Intel stuff. Now it sits there for months between reboots and hardly draws any power. And when that goes, I've got an 800MHz beastie waiting in the wings to take over.
Nope, Linux hasn't hurt Intel at all.
DT
Re:Oh, Dear (Score:5, Interesting)
They used to hide "right sizing" in the legions of temps.. but of course now it's better to shed the real employees and keep the temps!
Ya think? Having been a temp in this whole blue-badge, green-badge continuous reorganization scheme I can speak to this. In this environment the temp's got a lot of leverage. He can afford to call a turd a turd and not say it has potential. He can make fun of PHBs. He can do honest work and contribute without fear his out-of-scale achievements become the flag that gets him targeted for political career assassination. He can take bigger risks without fear of being labeled a 10%er. He has the power of laughter, and oh, what a power that is. He can do this because - what are they going to do? Fire him?
But this isn't Microsoft specific. I've never worked for them and I probably won't - they would have to pay enough more than I was worth to make me feel like I was exploiting them. Seinfeld money maybe. I would for what he got paid, and I think I could give them what they got for what they paid him.
They're just saying this to "look busy" so the stock market will still like them.
Agreed. Do you think anybody will notice their stock is worth half of what it was ten years ago today? Apple's good for 10x your money in the same period. For you 401K folks that's the leverage that investing in a growth company gives you. Companies that have achieved monopoly have no growth potential - the best they can hope for is graceful decline potentially (but rarely) followed by a bet-the company reinvention of process. This is going to surprise a lot of you dollar-cost-averaging investors, but betting that a company will survive the retirement of its founders is a very bad bet. If you start investing in a company at the beginning of your working life, and keep your money in that company throughout your careers, 95% of the time you'll lose it all because founders of companies don't have longer working lives than you do.
Re:Missing factors (Score:3, Interesting)
Sure, but most of those embedded devices don't run Linux either. Remember your original comment was to compare the embedded market between Linux and Apple, not Apple vs everything else.
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Re:Oh, Dear (Score:2, Interesting)
what did you think would happen when they gave the keys to the kingdom to a marketing guy? now if apple could come out with a no frills, stable-as-the-earth-itself bsd based server, sans hipness MSFT could be in serious trouble.
i've been saying for a while that MS has 10 years left, and by my count we've got 6 or 7 left, but i think at that time MS will be left with at most 60% market share and linux will be popular enough that companies besides id will write/port games for it. i don't however think linux will ever take over compeltely, but i'd be really happy with a 10% market share.
notice that hardware manufacturers want something besides windows. they keep poking and prodding linux, they may not give it full attention yet, but they keep looking. i think they *do* want to loosen MS' grip on their balls. HP supports nearly all of their printers on linux and some (one?) OEM's have offered linux on their products.
i freely admit that i WANT Microsoft to fail hugely and you can argue with me about that all you want, but first you have to admit that they fucking deserve it.
Re:Oh, Dear (Score:1, Interesting)
>
The fact that companies like HP and Dell sell netbooks (and pre-load Linux across their product lines) shows just how far the Linux trend has already progressed.
Linux netbooks have a 4 times higher return rate than XP ones though
http://www.osnews.com/story/20362/Canonical_Confirms_MSI_s_Linux_Return_Rate_Statement [osnews.com]
Sunday we reported on an interview with an MSI manager, who stated that internal research had shown that the return rate for the Linux version of MSI's Wind netbook was four times as high as that of the Windows XP version. He claimed that the unfamiliarity of people with Linux was the culprit. This claim sparked some serious discussion around the net, but now MSI's statement is being repeated by Canonical, the company behind Ubuntu.
One of the problems with MSI's Andy Tung's statement was that it was impossible to say if the figures extended beyond MSI's own Wind, and if it was possible to apply this claim to the general netbook market. Canonical's marketing manager, Gerry Carr, confirms in an interview that retun rates for netbooks running open source software is indeed higher than that of those running Windows XP. "We don't know what the XP return rates are," Carr states, "But I will say that the return rate is above normal for netbooks that offer open-source operating systems."
Carr further explains:
Unclear selling is happening, typically online. The customer will get their netbook sent to their home and they imagine to find something like a Microsoft desktop, but they see a brown Ubuntu version. They are unwilling to learn it and they were expecting to have Windows. We said a long time ago, we didn't want to make a Windows clone. It has a different interface especially with the Ubuntu Netbook Remix. We think it's a better way but it's not the same way people are used to. That unfamiliarity can take a while to learn and there is an education that has to be stressed.
As some have noted, it's interesting that people who switch from Windows to Mac OS X do not seem to have this problem. Personally, I believe that there are some logical reasons why this is the case. I think most people buy a Mac after having it seen in operation at a friend or relative, or even after having played with it at an Apple Store or an official retailer. Also, I think most people already know that Apple is different than Windows, and as such, when they choose to purchase a machine from Apple, they are aware it's going to be different. There is also a psychological effect at work; an Apple computer is not cheap, and post-purchase rationalisation will certainly play a role here.
These factors do not play much of a role in the purchase of a netbook. They are much cheaper, and often, online resellers are unclear that they do not come with Windows. In addition, people are simply less familiar with the whole concept of Linux than they are familiar with Apple - it is easier to deal with something new and different if you know there's going to be something new and different in the first place. And to make matters worse, there are probably very few 'real' retail stores who carry Linux machines for prospective buyers to test.
All in all, I agree with Carr when he says that it doesn't really matter how good or bad desktop Linux is; the fact that it's different is in and of itself reason enough for its adoption rate to be slow.
One of my clients makes hardware and they support Linux. They have Ubuntu machines in the test lab and the testers absolutely hate Ubuntu. Whereas thinks like Sleep and Hibernate just work on Windows, even the much maligned Vista, getting them to work on Ubuntu requires endless fiddling around.
For some people this fiddling around is a hobby, and a chance to prove to yourself that you're smarter than average. For most people, it's a waste of time.
Comment removed (Score:3, Interesting)