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Monday, November 04, 2002


On the back of the Microsoft settlement, most commentators, and most investors, have assumed that this is a big plus for Microsoft and profitability. But is it? As I pointed out yesterday, perhaps there is something that all these commentators just don't get (but Paul Andrews of the Seattle Times sort-of does):

"I see a possibility that the number of Linux users will create critical mass, but it's a long way off"

But there is that chance. And it exists largely because of the Microsoft settlement. Those who view the Justice Department settlement and Kollar-Kotelly's ruling as a slam-dunk for Microsoft have forgotten a key point: The settlement prohibits Microsoft from restricting computer makers' ability to "offer users the option of launching other operating systems from the basic input/output system or a non-Microsoft boot-loader." Microsoft's simple but brilliant sales practice of offering PC makers huge discounts if they installed MS-DOS (and, later, Windows) on each computer they sold was the bedrock on which the Microsoft monopoly was built. Today we're seeing cheap $199 PCs running Lindows and Lycoris (based in Redmond) — two Windowslike systems built on Linux — being sold on the shelves of Wal-Mart. At Fry's Electronics, a California computer chain, PCs with Thiz Linux are doing brisk business. Linux books and Web sites are thriving. Is this a revolution in the making? Nobody knows yet. But the process is reminiscent of the early days of personal computers, when a different monopoly known by three initials ruled the technology world. Users chafing under the restrictions of big, centralized computers were willing to devote time and effort to learning how to operate PCs. And then they showed their friends how. Pretty soon a movement took root. Monopolies are fought best through innovation. Technology watchers were outraged when the Reagan administration dropped the government's longstanding antitrust action against IBM. Given the green light, IBM went back to its monopolistic ways, threatening to squash upstarts like Compaq and Microsoft. It didn't work, partly because end-users hated IBM and what it stood for, partly because Microsoft offered an open world to developers. Today the Ze Ayalas of the world harbor similar enmity toward Microsoft. Their bandwagon is Linux and open-source software.

Linux may never threaten Microsoft's dominance. But that may not be the point. If all it does is provide an alternative to the Microsoft-bashers and Windows-haters of the world, and keep Microsoft honest enough to price its products reasonably while improving their quality, then the open-source movement will have accomplished far more than any government oversight or judicial remedy could ever hope for.
Source: The Seattle Times

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