News

Commentary: A Warped View of Monopoly

• By Joe McKendrick
• 03/19/2003

Last month, for the first time publicly, Microsoft chairman Bill Gates acknowledged that Linux is “very pervasive.” Microsoft also spells out the threat from Linux and open source in its most recent 10-Q quarterly SEC filing. In the document, Microsoft states that “to the extent the open source model gains increasing market acceptance, sales of the company's products may decline, the company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline.”

Privately, Microsoft staffers had been fuming for years about Linux, and jumped all over the credibility of studies that show the open source operating system gaining a foothold. In a way, Redmond ought to be glad Linux came along when it did. For now we know Microsoft was a lot closer to the truth than most thought when it denied it was a monopoly.

Interestingly, at last month’s Most Valuable Partners meeting in which Gates opened up about open source, he reflected back on his battle against IBM for supremacy of the desktop. “OS/2… wasn't a joke; it was all of IBM that was ten times the size of Microsoft putting all their energy, their leverage on ISVs, bundling it with their systems, everything they could do to beat Windows,” he said.

Now, turn that bit of history around for a moment. Imagine if OS/2 did trump Windows back in the 1990s. Imagine the monopoly we would be contending with -- far more serious than slipping in a free browser. With OS/2 Warp as the standard desktop operating and commodity server system, not only would one company would be controlling the OS layer, but also the processor, the box that houses the processor, the hard disk, the middleware, the applications, and even the integration services. IBM would have even controlled competing OSs, such as AIX and OS/400. Now that’s a monopoly. The U.S. government, state governments and overseas governments would have been licking their chops over this kind of antitrust action -- one that would have launched a thousand legal careers.

Last year, the U.S. Department of Justice finally began to put an end to this madness. However, the hamstringing continues. In December, a federal judge ordered Microsoft to include Sun's Java software in Windows. Microsoft still faces ongoing antitrust battles with some states, as well as foreign governments such as the European Union.

However, many are beginning to ask what was unthinkable a few years back: “Where did the monopoly go?”

ENT’s own survey of 800 Windows enterprise sites found that 37 percent of enterprise sites are running Linux on servers. Plus, Linux even appears to be gaining a foothold in Microsoft’s ancestral homeland -- the desktop. The survey finds that 25 percent of the sites surveyed have Linux running on client machines. Just 18 percent run Macs.

While Microsoft has pulled strong-arm tactics to keep its VARs and end-user companies in line and forced into upgrades, there are choices in the market. And IT managers are exercising their choices in droves. Many IT managers I’ve spoken with over the past year say they are moving at least some applications from Windows to Linux environments.

All through IT history, large vendors have always tried to play the FUD card -- casting fear, uncertainty and doubt -- to gain the upper hand in the market. FUD was around before Microsoft came along. Bill Gates was quick to point out that there’s plenty of FUD in Linux as well. “There's more incompatible versions of Linux than there are of all other operating systems put together,” he pointed out. “As people do innovations on top of Linux, they don't all get tested together and they're not all consistent with each other.”

Good. Bill is making the effort to convince us why his product is better than the competition -- instead of trying to deny that it exists. Sounds like we have a fair fight brewing here. And it’s going to be a huge fight. May the best system -- and hopefully, ultimately the customer -- win.