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Microsoft Linux Business

Microsoft Acknowledges Linux Threat To Windows 348

angry tapir sends along coverage from Good Gear Guide of a recent Microsoft !0-K SEC filing: "Microsoft for the first time has named Linux distributors Red Hat and Canonical as competitors to its Windows client business in its annual filing to the US Securities and Exchange Commission. The move is an acknowledgment of the first viable competition from Linux to Microsoft's Windows client business, due mainly to the use of Linux on netbooks, which are rising in prominence as alternatives to full-sized notebooks. ... 'Client faces strong competition from well-established companies with differing approaches to the PC market,' Microsoft said in the filing. 'Competing commercial software products, including variants of Unix, are supplied by competitors such as Apple, Canonical, and Red Hat.'"
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Microsoft Acknowledges Linux Threat To Windows

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  • This Is News??!!! (Score:5, Insightful)

    by Anonymous Coward on Tuesday August 04, 2009 @09:52PM (#28950669)

    A throwaway line in a 10-K report which nobody reads or takes seriously is given a front page news story on slashdot??

    Are you guys really this desperate to drum up the anti-Microsoft pagehits?

  • by pasamio ( 737659 ) on Tuesday August 04, 2009 @09:52PM (#28950671) Homepage

    This isn't an acknowledgement of Linux, its something to use as ammo to prove that they don't have a monopoly. Don't get the warm fuzzies over Microsoft acknowledging Linux because its just marketing and politics.

    • I'm no Microsoft fan, but I'd say that does prove they aren't a monopoly. (They're just a near-monopoly.)
      • by lamadude ( 1270542 ) on Tuesday August 04, 2009 @10:04PM (#28950771)
        A monopoly does not necessarily mean that you have no competitors.
        • Re: (Score:2, Insightful)

          Not according to my dictionary...

          1. Exclusive control by one group of the means of producing or selling a commodity or service: "Monopoly frequently ... arises from government support or from collusive agreements among individuals" (Milton Friedman).
          2. Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.
          a. A company or group having exclusive control over a commercial activity.
          b. A commodity or service so contr

          • by RedK ( 112790 ) on Tuesday August 04, 2009 @10:21PM (#28950891)
            In the real world and for anti-trust legislation, you aren't required to have 100% market share to have a monopoly. The fact is, Microsoft were found to have one, and they aren't in a much different position now, as far as Windows installed based goes.
            • Maybe the more meaningful part is the 'control' part.
          • You could have googled a legal definition. I'll note that "from collusive agreements" fits MS exactly.

            "An economic advantage held by one or more persons or companies deriving from the exclusive power to carry on a particular business or trade or to manufacture and sell a particular item, thereby suppressing competition and allowing such persons or companies to raise the price of a product or service substantially above the price that would be established by a free market."

            Even in Al Capone's Chicago, other

          • What market? (Score:2, Insightful)

            by BrokenHalo ( 565198 )
            The "market share" of Linux is hard to define, in any case. Sure, sales of RedHat or other commercial distros can be counted, or you could make a case (maybe) for using the LinuxCounter stats, but the simple fact is that there are many who simply download a distro and distribute it ad lib, which is sort of the whole point of free software. We will never really know how many users are running Linux.
            • Re: (Score:2, Insightful)

              by reub2000 ( 705806 )
              Don't forget that many linux installations are on computers that originally came with an OEM copy of Windows, which counts as a sale of Windows. The best way to assess market share is through a survey.
          • The dutch railroads (NS) never had a monopoly in holland. Not even when they completly controlled ALL rail travel because well, there was always the steam train in De Efteling (attraction park) and even some tourist trains.

            I think most sensible people would have exclude these and say that a company that has 90%+ of a market has a very effect control, even a monopoly. It would depend partly on the market, but MS software is sadly one market where a monopoly quickly arrises. MS software a market? Indeed.


      • Re: (Score:3, Interesting)

        Would you be happier if they were using the term oligopoly []? Then you could chuck Apple in with MS and it would be blazingly accurate.

      • I think(hope) you're being funny. The use of the word
        prove[s] is my hint.
    • by Nefarious Wheel ( 628136 ) on Tuesday August 04, 2009 @10:00PM (#28950743) Journal
      It's more of an indication that they want to discharge their obligations in reporting threats to their business from competitors. The stock exchange and rules for publicly traded securities require this sort of disclosure to holders of a company's stock. I think it's purely a matter of adhering to their obligations for honest reporting to the people who own them. NTSHMA.
    • Re: (Score:3, Funny)

      by Anonymous Coward

      I don't think your average Linux zealot will get warm fuzzes, but rather a raging hard-on. They've warped computers and software into something of a battle between forces of good verses evil on a level that could inspire it's own Star Wars sequel. They will use this as proof their crusade has the "Dark side" worried. They are so like children.

    • by Dachannien ( 617929 ) on Tuesday August 04, 2009 @10:03PM (#28950761)

      Very good point. The true indicator of Microsoft considering itself to have real competition is when it starts pricing its products competitively.

      • by shanen ( 462549 )

        That's not possible without competition to define the true value of the software. A big chunk of Microsoft's business model has always been to hide the price from the actual customers by bundling their software in with hardware so that most of the end users don't even know what it cost them.

        The problem with pretending that any Linux distro is a competitor to anything is that none of the Linux distro's have a viable economic model. Living on charity doesn't cut it for real programmers.

        My suggestion of a new

        • Re: (Score:3, Insightful)

          by falconwolf ( 725481 )

          The problem with pretending that any Linux distro is a competitor to anything is that none of the Linux distro's have a viable economic model. Living on charity doesn't cut it for real programmers.

          Though not in the same league as Microsoft, there are Linux distro companies and venders that make a nice profit. One which is in MS's league is IBM, and it had gross profits of $45.66 Billion [] on revenue of $97.27 Billion. That's less than $1 Billion less than Microsoft's [] profits. Redhat [] had profits of $546.45

        • Re: (Score:3, Interesting)

          by speedtux ( 1307149 )

          The problem with pretending that any Linux distro is a competitor to anything is that none of the Linux distro's have a viable economic model. Living on charity doesn't cut it for real programmers.

          Will you stop spreading this kind of FUD? Linux developers are generally well-paid, by companies that know exactly why they are paying for this kind of development. There is little "charity" involved in developing open source software.

          That's not possible without competition to define the true value of the softwa

      • That's the most asinine statement I've ever heard.

        Our Windows licenses are cheaper than our Redhat licenses and always have been. By your definition, Redhat "has no real competition". Please.
      • Hmm...

        Cheapest Apple Laptop: $999

        Similar Vista Laptop:
        +200 Full Office Suite
        + 99 Adobe Elements
        + 99 Anti-Virus

        Looks like they're competitively priced to me.

        • Can't you at least try to be fair. Why would I spend $99 on anti-virus when there are any number of perfectly good free ones out there. Adobe Elements??? Wtf do I want to spend $99 for that? I can get Picassa or Gimp or for free. Chances are the Vista laptop comes with MS Works (mine did) so an office suite seems kinda unnecessary. If not, Open Office will do. So - $600 vs $999. Looks like they're not competing very hard on price.
    • Not anti-trust avoidance at all.

      Havent you been reading?!?

      Microsoft is accusing Linux of cyber-bullying and will use this to have linux outlawed in the US, Germany and the UK.

      another diabolical move.

    • Laughably, acknowledgment changes nothing. But that doesn't mean we shouldn't party for the blue skies above us!

    • by haruchai ( 17472 )

      It's not really the first time, but it may be the first time they've put in an official filing. Here's a article from 5 years ago: []

      But, I think you're absolutely right that this is a ploy. And, they can play the marketing and political game like no other IT company.

  • by Antique Geekmeister ( 740220 ) on Tuesday August 04, 2009 @10:12PM (#28950819)

    Watch this sort of announcement very, very carefully. Microsoft loves to describe Linux as a 'UNIX variant'. In both its basic kernel and its accumulated software bundles, it's as valid as calling Windows XP "DOS". (For those new to Microsoft history, XP is actually a Windows NT descendant, which is in many ways descended from VMS and many of its fundamentals stolen by David Cutler from DEC, where David wrote much of VMS and was hired to work on NT.)

    • "Microsoft loves to describe Linux as a 'UNIX variant'."

      Microsoft is right. Linux is Unix. It's why I started using it. Can it legally be called Unix? No. But if it walks like a duck, etc, it's a duck. Linux is after all a clone of Unix. It's Unix in all but name. A clone of a dog isn't a cat after all... it's a copy of a dog. Comparing Unix and Linux to DOS and XP isn't a good comparison. The former is an OS and a copy of that OS. The later is an earlier OS and it's evolutionary descendant, and XP is more of a nephew to DOS than a son, considering that NT was conceived as a different OS than DOS... it was just built to be largely compatible with DOS.

      • by RedK ( 112790 ) on Tuesday August 04, 2009 @11:30PM (#28951451)
        Linux is not Unix. It's a close approximation. For one, the base APIs are not fully POSIX compliant. Right there is a big hurdle to being Unix. If someone were to pony up the cash for certification (RedHat, Novell, Cannonical), there are issues yet to be fixed before it can be called UNIX, so it's not just a question of certifying it.
        • Re: (Score:3, Insightful)

          by moon3 ( 1530265 )
          Linux ~ UNIX is a trademark issue, POSIX "Portable Operating System Interface for Unix" compliance is an IEEE standard implementation issue. These are two distinct problems.
          • Re: (Score:3, Interesting)

            by RedK ( 112790 )
            I don't know how you got Insightful. The OpenGroup, in the process of certifying something as Unix compliant and thus be able to use the Unix trademark, issues a testsuite which must compile and run successfully. One part of this test suite is POSIX compliance. Linux wouldn't pass this. As such, it would never be able to use the Trademark. So no, you are wrong, they aren't distinct at all, they are very related.
    • Isn't Linux a Unix variant?

      • No, but "Windows NT is a better UNIX than UNIX." Linux is a minix-like monolithic kernel operating system.
        • Re: (Score:3, Insightful)

          Correct me if I'm wrong, but didn't Torvalds and Tanenbaum get in a famous fight over the fact that being a "monolithic kernel operating system" is precisely unlike Minix's microkernel solution?

          • Re: (Score:3, Informative)

            by filesiteguy ( 695431 )
            Yes, they did. Here's Linus' announcement of his "minix-like" kernel:

            And here is the famous Tannenbaum/Torvalds "Linux-is-Obsolete" debate:

            " Most older operating systems are monolithic, that is, the whole operating
            system is a single a.out file that runs in 'kernel mode.' This binary
            contains the process management, mem
        • And Minix is Unix clone, which would basically make Linux (assuming GNU is included) a Unix clone as well.
      • No. Linux is a kernel that implements some common Unix features (like a single root filesystem), but not all of them. When you run GNU on top of Linux, you get a Unix clone, but there are plenty of people who are not running GNU on top of Linux, or who are only using small pieces of GNU like the linker. Even though the OLPC is running Linux, and has a fairly significant portion of GNU, I would hardly say that an OLPC is running a Unix variant or clone -- it is running what is best described as Sugar/Linu
    • which is in many ways descended from VMS and many of its fundamentals stolen by David Cutler from DEC

      If David Cutler stole Window NT from DEC, then Linus Torvalds stole Linux from Tannenbaum... or for that matter, SCO...

      I just love how the FOSS community routinely rips someone else that borrows, but then has no problem supporting their own borrowing.....

    • Watch this sort of announcement very, very carefully. Microsoft loves to describe Linux as a 'UNIX variant'.

      They do? News to me.

    • Stole everything but the stability? NT was a lot better than 95/98/ME but hasn't come close to the reliability of VMS.


  • by Anonymous Coward on Tuesday August 04, 2009 @10:15PM (#28950837)

    In 2003 Microsoft wanted everyone to have a 'trusted computer' to make sure the owner couldnt fuck with the proprietary software. of course many software companies and Google realised that wasn't going to happen so they decided to push SaaS and have everything run remotely through a horrible, JavaScript laden web interface.

    but i tell ya its better than the alternative MS was pushing. still because the good old enemy that is MS is being cut down to size does not mean it's a good idea to give up on free desktop-based client software. Web apps and other remote apps are not the best way and certainly not the most efficient method but it is the new way of making money from software.

    As the owner of a webb app you have total control over when it is accessed, you can see everything clients are doing, you can put as many ads on it as you like and nobody will slate you for distributing 'adware' or 'spyware'. As long as you do everything server-side you have almost 0 chance of your stuff being pirated. This is better than DRM, its better than trusted computing and all without the invasive 'get out of my PC' sentiment associated with Microsoft's client-side type of security

  • by HangingChad ( 677530 ) on Tuesday August 04, 2009 @10:21PM (#28950885) Homepage

    It's not just posturing for the SEC this time. Talked to one of our vendors back east this afternoon and his mom liked his netbook so much he bought her one, then his dad wanted one, then another one for his step-mom. That's bad news for Microsoft for two reasons: One, Linux really is competitive on low-end hardware. The combination of Linux, Gmail, GoogleDocs and online services gives netbooks functionality that makes the OS less significant.

    And, two, Microsoft can't demand their normal margin on a netbook OS. The cost of the unit is so low MS is forced to price their product lower. That's hurting revenues and that trend will only continue to accelerate. Windows 7 will run on netbooks, but not particularly well. Windows Mobile isn't going to gain them any market share and they can't sell XP on netbooks indefinitely.

    The netbook trend caught MS flat-footed and they threw XP at it to fill the gap while they scramble around to try and find a solution. But there isn't one this time. Microsoft built their market at the top end of the scale, not in the appliance market. Their software isn't made to run on low-end hardware, they have no appliance market strategy.

    This time, I think they're entirely justified of being afraid of Linux.

  • by bcrowell ( 177657 ) on Tuesday August 04, 2009 @10:26PM (#28950935) Homepage
    I hate to say it, because I'm a linux fanboy, but Linux on netbooks has more or less failed. Manufacturers like Asus dropped the ball by shipping too many Linux machines with screwed up configurations (and also with the crappiest Linux distros available). MS also recognized the threat and entered the ring fighting. The result is that most retailers are pushing netbooks with Windows, and most people buying netbooks are buying them with Windows. Maybe this will change if ARM-based netbooks really take off, but I suspect it will be the same story all over again.
    • Exactly, I feel sorry for the person who used the awful distro that is Xandros and thought that was all Linux was. Asus while the original EEE PCs were good and seemed to be seamless, some of the later ones were strange. Mix in the fact that the hardware was questionable, and no real "advantage" to use Linux and the drop in price on some full laptops (I'm typing this on a $300 new Toshiba with a 15 inch screen, 2 gigs of RAM and an Intel Celeron 900 at 2.2 Ghz) lead to the death of Linux on netbooks. Howeve
    • Please don't confuse marketing and OEM site licencing deals with failure of Linux on technical merits.

      Ubuntu on the Aspire One is great. Marketing played the major role in getting XP on all netbooks. Info on this work in progress is here. []

    • Re: (Score:3, Insightful)

      by oodaloop ( 1229816 )
      Maybe Linux failed, but if Microsoft had a victory, it was a Pyrrhic one. They were trying to kill XP and move to Vista when the netbooks took off, and instead they had to keep extending XP in order to keep in the game in this emerging market. Netbooks aren't going anywhere, in fact I suspect we'll see a continuing trend of similarly powerful machines at lower costs vice more and more powerful machines at the same or higher cost. Microsoft's products, bloatware they are, are not poised to succeed in this
    • Re: (Score:3, Informative)

      When I bought a netbook for traveling this summer, Dell sold me one with Ubuntu 8.04 pre-loaded on it.

  • From the article:

    Microsoft for the first time has named Linux distributors Red Hat and Canonical as competitors to its Windows client business in its annual filing to the U.S. Securities and Exchange Commission.

    Yeah, there are lots of pointless legal disclaimers in 10-K filings to cover respective companies' own asses.

    It's not the first [] time [] that [] Microsoft [] has acknowledged [] Linux as a threat to their business model. It might be the first time they have put it in their 10-K report, but I don't consider legal disclaimers in an annual SEC filing to be newsworthy.

    Has anyone read the Red Hat, Inc. 10-K report. Anyone take the time to count the number of competitors, listed by name, in there? Now ask yourself, is that newsworthy?

    • It might be the first time they have put it in their 10-K report...

      It isn't. Here [] is one from 2003:

      Although we are the leader in operating system software products, we face strong competition from well established companies and entities with differing approaches to the market. Competing commercial software products, including variants of Unix, are supplied by competitors, such as IBM, Hewlett-Packard, Apple Computer, Sun Microsystems and others, who are vertically integrated in both software development and hardware manufacturing and have developed operating systems that they preinstall on their own computers. Personal computer OEMs who preinstall third party operating systems may also license these firms' operating systems or Open Source software, especially offerings based on Linux. Variants of Unix run on a wide variety of computer platforms and have gained increasing acceptance as desktop operating systems, in part due to the increasing performance of standard hardware components at decreasing prices.

      TFA asserts that this is the first time that Microsoft has named names of Linux vendors, but that's not strictly true either. The same 10-K filing from 2003 says the following in the "Server and Tools" section: "A number of companies supply versions of Linux, including Red Hat and VA Linux."

      Overall, this is yet another total non-story based on sloppy reporting. More importantly, the Slashdot editors should be ashamed of themselves for displaying such ignorance about the compe

  • Canonical and other Linux players need to take steps needed to make certain that the Linux that the netbooks ship with is not some bizzarely broken configuration. A netbook that ships with Ubuntu should ship with the same Ubuntu you find on the Ubuntu installation CD. No more of this "Custom distro crap".

    • by betterunixthanunix ( 980855 ) on Tuesday August 04, 2009 @11:00PM (#28951237)
      The last thing anyone needs is a netbook that is running an OS that was intended for a full-power PC. The latest Ubuntu, Fedora, OpenSuse, etc. all ship with features and software that expect lots of memory and CPU time -- not something you are likely to have on a netbook. What should really happen is for the distro maintainers to create their own netbook spins, which cut out a lot of the features that are unneeded on a netbook and slim down the OS.
  • Ok Ok.. I get it (Score:3, Insightful)

    by joocemann ( 1273720 ) on Tuesday August 04, 2009 @10:48PM (#28951121)

    .... I'm supposed to load Ubuntu, fire up chromium, load and flip off the screen before jumping on the bed for a quick victory fist pumping.... ........ now my point... what does 'acknowledgment' do to reality? Nothing. It's about as effective as some guy on the side of the road giving you a 'nod' because he looked your way... Doesn't really change anything you're doing, where you're going, or whats actually happening... does it....

    Its nice to see linux prevailing, but lets not all get so worked up about 'acknowledgements' quite yet, lol.

  • I am not surprised to see this kind of release. After all, they need to hold on to that monopoly position on the desktop to keep their server business afloat.

    What was interesting was the complete lack of any mention of Novell's SLED product. Remember, that MS and Novell are in cahoots to put servers out there running both Windows Workstation 2008 and SLES. In fact, I distinctly remember Ballmer last year mentioning "suzie" in one of his speeches at the Visual Studio 2008 launch event.

    Oddly enough, also, there's no mention of a distribution running KDE. Both Ubuntu (which I use now on my laptop) and Red Hat are GNOME-based distros by default. SLED (and openSUSE) are also becoming more GNOME-centric. (I know you can put KDE on any of these, and I run KTorrent as well as KRDC in my desktop.)
  • by w0mprat ( 1317953 ) on Tuesday August 04, 2009 @10:54PM (#28951179)
    It seems Dell, ASUS HP and others have invested in shipping linux based machines partly as something to threaten MS with. Simply put, Linux doesn't sell PCs (yet), Windows does. Watch TV, you'll see Microsoft and Apple ads but you won't see a damn thing about linux. TV, Print and Radio validates the product to consumers.

    Add in the the evergreen problem: Windows PC tax is more or less the same regardless if it is a $200 netbook or a $3000 overkill gaming rig. You think PC/Laptop manurfaturers like having only one choice of OS? It's a liability.

    Frankly all the OEMs are probably pissed at having their bottom lines hurt by Vista too.

    Linux offered something they could bludgeon MS with and demand a discount. Result, MS really did come up with cheaper OEM licences and are even producing Windows 7 starter, but only after Linux gained some traction in the netbook arena.

    Google sees the oppurtunity to pimp it's cloud services by doing Chrome OS, which is going to fill the need of PC makers to have yet better tools to apply leverage against microsoft.

    I'm not convinced that Linux will ever squash Windows, the test of this being possible will be seen in the smartphone arena. Can Android conquer the iPhone? If it does then I'd believe Linux becoming the no 1. OS within a decade.

    Frankly, Linux is inside routers, set top boxes, embedded devices, PMPs, mobile phones (WebOS and Android are linux), and runs more than half the internet servers and the majority of the worlds top supercomputers and datacentres. Yet none of these companies are wearing the Linux badge, you don't hear Palm, Google, IBM, Linksys, Cisco evangelising Linux all over the TV and radio.

    It's rather worriesome. I don't really have an answer why.
    • by wampus ( 1932 ) on Tuesday August 04, 2009 @10:59PM (#28951231)

      It's rather worriesome. I don't really have an answer why.

      Because no one outside of the faithful really care. Why would vendors waste time advertising something that is irrelevant to 99% of consumers? At best, for business sales Linux is more of a bullet point than a feature to be trumpeted.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      Frankly, Linux is inside routers, set top boxes, embedded devices, PMPs, mobile phones (WebOS and Android are linux), and runs more than half the internet servers and the majority of the worlds top supercomputers and datacentres. Yet none of these companies are wearing the Linux badge, you don't hear Palm, Google, IBM, Linksys, Cisco evangelising Linux all over the TV and radio.

      This is to be expected and, possibly, welcomed. IBM promotes "IBM Solutions/Partnering". Google promotes "Ad Sense" or "Chrome".

  • "!0-K"

    Microsoft's secret way of letting programmers that things are not okay!!!

    Quick! To the Bat Chair!

  • Acceptance is the first step in overcoming a problem...

  • They can just try the DMCA card and have a max of 10 years for installing linux just like the story about a max of 10 years for moding a xbox.

  • Yawn... (Score:5, Insightful)

    by SwashbucklingCowboy ( 727629 ) on Tuesday August 04, 2009 @11:59PM (#28951613)

    This is NOT news. You'll find this in every such filing going back for years people...

  • Android? (Score:5, Interesting)

    by cybereal ( 621599 ) on Wednesday August 05, 2009 @12:32AM (#28951857) Homepage

    I know everyone's really excited that their imaginary enemy has finally validated their existence as a threat but let's be more realistic here. If there's anything remotely interesting about this filing, it's that android and the upcoming Chrome OS is not mentioned at all.

    To me it seems more like a message of disrespect to google, a more realistic competitor, than anything...

  • Real threat? (Score:5, Insightful)

    by uffe_nordholm ( 1187961 ) on Wednesday August 05, 2009 @05:24AM (#28953819)
    Apart from the obvious "Linux is a threat to us and therefore we are not a monopoly" I think Microsoft may very well percieve Linux as a threat to them, but for slightly less obvious reasons.

    The major reason that Linux is a threat to Microsoft is that it is (usually) free, and nobody can compete with free in the long run. Given enough time, Linux would eventually conquer the desktop. But it would be decades, if not centuries. If nothing else, Linux's small presence on the market means that Microsoft cannot raise it's prices too much, or people will start seriously looking at the alternatives. And if they discover the alternatives are good enough (or better then Windows) for no money (or very little money) the game will be up for Microsoft.

    There is a more threatening aspect of Linux though. It is not one that matters every day, but in the long run Microsoft must deal with the fact that a lot of "Linux" is a community. A community of users and developers spread around the globe cannot be purchased and shut down as if it were a competing company. Suppose Microsoft purchased Cannonical and shut it down. They have not really gained anything, since they can't stop the individual developers from continuing their work, even if it is in their spare time.

    Even if Microsoft started buying all companies that released a Linux distro, they cannot win: once it becomes obvious that to become a millionaire you just have to release a Linux distro, new distros will be popping up so fast that rabbits will reproduce slowly, by comparison.

    I think the only way for Microsoft to keep "winning the game" against Linux is to constantly produce better and better software for lower and lower prices. Since Linux's market share seems to be growing, Microsoft is already under pressure to not raise their prices too high, and this pressure will increase several times over with increasing market share for Linux.

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