If you look at the history of computing, very few companies manage to resurrect falling fortunes to lead their respective markets. Does this mean that once down, a company should resign itself to being out?
Apple is a famous example of a come-from-behind victory, but also a poor one: while it wins plaudits for its sexy MacBook Pro laptops, it still commands less than 10 percent of the personal computer market. Good, but not great.
In browsers, Firefox was left for dead years ago, only to get a new life and 22 percent market share. But Mozilla executive Mitchell Baker is quick to call Firefox's resurgence against Microsoft an "anomaly."
Few companies or products challenge an incumbent, at least not on its own turf. Disruption is required to displace an incumbent, following Clayton Christensen's thinking in "The Innovator's Dilemma."
Laughing all the way to the bank...
All of which makes me doubt Google's efforts to beat Apple in smartphones, and suggests Nokia and Motorola aren't going to fare much better. They simply aren't disruptive enough.
Nokia, for its part, made a big gamble open-sourcing Symbian after years of nurturing it as proprietary software to run mobile devices. The company has now discarded Symbian for its foray into Netbooks by partnering with Microsoft, a move that exacerbates its weak-kneed decision to bolster its mobile strategy with Microsoft Office. Nokia's approach leaves pundits like Joel West wondering "how Nokia will have an advantage on scale, innovation, features, branding or distribution over existing netbook makers," not to mention traditional mobile and laptop makers.
Disruption through Windows or Office? Unlikely.
Microsoft compounds the error by playing up its more expensive application for Windows Marketplace for Mobile, a strategy doomed to fail. Microsoft is playing to the developers' wish to make more money per customer, but if those customers prefer the iPhone, who cares how much Microsoft lets developers charge?
It's not just Microsoft and its crowd that are screwing up. Open source has also failed to offer a disruptive panacea. Motorola is betting big on the Google Android platform, but thus far has little to show for it.
Google, for its part, has attempted to disrupt Apple's iPhone in its apparent area of weakness: its closed nature. Google open-sourced the Android platform and invited the world of third-party developers to flock to it.
They never came.
As Slate's Farhoo Manjoo writes, "Even though it's far friendlier to developers, Android has failed to attract anywhere near the number of apps now clogging the iPhone." Android may be open, but it's not cool, and "cool" is where customers and, hence, developers are.
Which leaves me with my original question: if a vendor finds itself playing catch up, should it even bother running the race? In response I'd suggest that unless a vendor is willing to commit significant resources to a disruptive strategy, it might as well give up.
Of the companies mentioned above, only Google has a disruptive strategy, but it isn't spending nearly enough resources to tackle Apple's iPhone. Until it does, it will lose, open source or not. As for the others, neither Microsoft nor open source will save them, as they lack even a hint of disruption in their game plans.
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Google becomes more like Microsoft every day. It used to be that only Microsoft could pre-announce a product to mass hysteria (and mass exodus of start-ups dabbling in the area), then proceed to under-deliver for the first few iterations of the product and still make billions in the process. With Google Chrome OS, Google has signaled that it, too, can over-commit and under-deliver and still mint billions.
But let's step back and strip away the frenzied media response to Google Chrome OS to determine what, exactly, Google announced: Google announced that it was shipping Ubuntu.
No, Google isn't calling it Ubuntu, but Chrome OS is nothing more than the promise of an Ubuntu fork. Given that we have Ubuntu and plenty of other Ubuntu forks today, what's the big deal?
Heck, for that matter, we also have Jolicloud, another Linux fork that promises to be an "Internet operating system" for Netbooks, just like Chrome OS. (Ubuntu makes largely the same claim.)
The difference, of course, is that you can actually use Jolicloud today (alpha version), unlike Chrome OS, and I'm actually typing this on an Ubuntu-based Netbook. (Incidentally, you've got to think that Jolicloud's investors were kicking themselves last week when Google announced Chrome OS a day after they announced Jolicloud's funding.)
So, Google will ship an Ubuntu fork, but one that presumably will come with its own secret sauce. Why? Well, as CNET's Rafe Needleman generously suggests, because "The stakes are big enough that it's worth the shot for Google."
Maybe. Maybe not.
Let's assume "Maybe." This still leaves Google with the stated intent to tackle a Lilliputian market that only the Linux crowd seems to get excited about, which is why Barron's slaps the idea around:
I think Google misunderstands the nature of netbooks, which simply are small, cheap, lightweight PCs. Early versions ran Linux, and didn't sell. Once the netbook companies loaded them with Windows, sales picked up. On its last earnings call, Microsoft noted that the attach rate for Windows on netbooks had reached 90%. The people have spoken. Netbooks are a misnomer; while people do use them to connect with the Web, they use them for a lot of other things. Customers want netbooks to run standard software, including Office. And I doubt there will ever be a version of Office for Chrome OS.
Of course they won't support Microsoft Office. They're going to support Google Docs! (See "Microsoft moment" above.) Much as I like Google Docs, and much as I like OpenOffice and a range of alternatives to Microsoft Office, the reality is that if you don't support Microsoft Office, you automatically limit the market appeal of your operating system, a lesson Apple learned. Apple's support for Office was the beginning of its rise within enterprise computing.
It's just incredibly hard to overcome the inertia of an incumbent in an established market. Google looks smart when it is changing the rules for computing (giving search away and charging for ads, moving e-mail to the cloud, etc.), but when it competes with Microsoft on its terms...it's likely going to lose. Mozilla's Asa Dotzler gives a hint as to why. (Spoiler: It's the installed base, stupid):
New markets on the Web can emerge and grow really quickly. There's lots of opportunity for something like Facebook to take over in just a few years. But that's not really the case for PCs and desktop software. The installed base is just really, really large, and the growth and upgrade cycle are much much slower than with Web services.
Firefox has been the most successful piece of desktop software to ever challenge Microsoft's offering. We started the effort 10 years ago and finally arrived at a successful product 5 years ago and in the 5 years since we shipped that product, we've managed to gain about 300 million users and a quarter of Web browsing usage.
Apple has been the most successful operating system to challenge Microsoft ever and they've managed in the 8+ years of OS X availability to grab only about 5% of the global OS installed base.
It's just not fast or easy to move a market that's more than a billion large. Anyone that thinks that major change can happen in months, or even a couple of years, doesn't understand this space very well.
Google came out with a new browser (Chrome) some time ago, and still barely scrapes 2 percent market share. (Fake Steve Jobs says this is because "Chrome is [crap]," but I think it has more to do with the difficulty of changing consumer behavior.) Firefox has done better, but even Firefox is an example of just how hard it is to fight an incumbent on its terms, particularly when the incumbent is perceived to be "good enough," as CIO.co.uk editor Martin Veitch notes.
It won't help that Google doesn't look or behave in the way enterprises demand, as ZDNet's Larry Dignan writes.
In sum, Google has a lot to prove, and doesn't have a track record of churning out hits. It has one significant moneymaker, whereas Microsoft has two, one of which Google is now targeting with Chrome OS. It's going to get ugly, but I suspect Google may be the company that ends up with the black eye. As an open-source advocate, I'd like it to be otherwise, but I just can't see enough differentiation in Google's approach to suggest it will be more successful than others before it.
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It was just a matter of time before Google stopped pretending it doesn't compete with Microsoft and introduce its own operating system to go head-to-head against Microsoft. As reported by CNET, Google has now lifted the covers on its Google Chrome OS, "an open source, lightweight operating system that will initially be targeted at netbooks."
More specifically, while Google claims Chrome OS looks to the future of a Web-friendly OS, this is precisely the future that Canonical's Ubuntu has been envisioning and actively courting. It's therefore not surprising that Ubuntu enthusiasts like Renai LeMay ask why Google apparently elected to "splinter the Linux community" rather than "leverage the stellar work already carried out by [Ubuntu]."
Why indeed?
Well, because Google clearly wants to pull a Microsoft. Yes, Google has stated that "[a]ll web-based applications will automatically work," and not just on Chrome OS, as doing otherwise would be suicide, but you can bet that Google will fine-tune its own applications to privilege their performance on its OS...just as Microsoft has. At least Microsoft doesn't ask the open-source community to help it in such work.
Google may well be focused on simply creating a "delivery mechanism for a web browser," but as Gunnar Hellekson opines, there are far more efficient ways to do so. Hellekson goes on:
Google keeps dropping these code bombs on the [open-source] community -- that's a really expensive way to produce something nobody wants to help with.
In short, don't expect the open-source community to do Google's work for it, work that Google may not be particularly well-suited to do.
All that said, I'm glad to see more competition in operating systems, and think Google will do a lot to help push the state of the art, just as it has in browsers. But let's be clear: Google's announcement is neither cause for widespread elation (open-source world) or fear (Redmond). As ZDNet's Dennis Howlett explains:
Where's the secret sauce here other than the Google halo effect painted over with the browser and duly hyped by the SV Google lovers?...[T]he reality is no one outside the Silicon Valley tech bubble gives a damn what operating system and browser they use. Many are still mandated to use IE6 as a colleague reminded me the other day. Simply having Google wave its hand is not going to sway hard nosed enterprise buyers - even if it is free. Which neatly brings me to another point.
Google has said it wants to get help from the open source community. I'll bet they do. All those drivers that [TechCrunch editor Michael] Arrington dismisses with a wave of the hand WILL need to be served. If he thinks I'm wrong then a quick call to any of the major banks' CTO offices should put him straight on that one....Even...when ChromeOS does emerge it will be a v1.0. No enterprise buyer I know will go within a country mile of committing its users' kit to something at that level of maturity.
In other words, Chrome OS has a long way to go before we see it hit significant volume of adoption, no matter how good it ends up being, and particularly enterprise adoption.
As for how good it will be, Robin Yellow, a friend who works in IT for a Fortune 100 company, notes that "Google are a bunch of young people in California who ride Segways and wear their pajamas to work," which may not be the ideal bunch to create software that enterprises of the world want and will trust. That's a concern shared by Red Hat's director of product management, Rich Sharples, who worries: "What Linux needs is a true consumer-grade desktop - the Google experience still seems to be aimed at the tech savvy."
Google opted to "build" its own Linux distribution, rather than use a wildly popular, Web-focused OS like Ubuntu. It is doing so with a team that lacks Microsoft or Apple's flair for enterprise and consumer, respectively, and has asked for the open-source community to make up the difference.
Good luck with that. Open source does many things exceptionally well. End-user design doesn't tend to be one of them.
I respect Google's technological savvy. I respect even more the development chops of the open-source community. Unfortunately, I don't think either is a near-term, credible developer of a consumer-friendly OS that will motivate people to want to move from their Macs or Windows machines to adopt Google Chrome OS.
That's why I think CNET's Ina Fried should change her headline from "To challenge Google, Microsoft might want to think Apple," to "To challenge Microsoft, Google might want to think Apple." Google is the challenger, and the reality is that exceptional design, not merely technology advances, is what will drive consumer change.
If Google needs a reminder of this, it need look no farther than Android, its open-source alternative to Apple's iPhone OS, which is long on technology and short on success, precisely because it fails to understand and allure the consumer.
If Google really wants to leverage the power of open source and outdo Microsoft and Apple in ease of use, perhaps it should find a way to broaden the base of the open-source development community to include average users so that your mom, my brother, etc. can provide feedback on how to improve ease-of-use of Chrome OS. Now that would be innovative.
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Linux Foundation president Jim Zemlin talks up Moblin
(Credit: Matt Asay/CNET)For years, Linux enthusiasts have tried to win an unwinnable war: displacing Microsoft's hegemony in personal computers with Windows clones. Though Lindows was perhaps the first to make a serious attempt at replicating the Windows experience, all the Linux "desktop" vendors have tried it, and all with the same result:
Failure.
This isn't because Linux isn't any good as a personal computer operating system. It's because such copycat tactics have doomed Linux to always being a cheap facsimile of Microsoft's idea of what the personal computer should look like and do.
With Moblin version 2.0, the Linux-based operating system Novell and Intel designed specifically for the Netbook market, the Linux "desktop" crowd seems to finally have the right idea: change the game, not simply the price tag.
I spent Thursday working on the Moblin-based Asus Aspire One (AOD150-1165) Netbook. I am still getting used to the somewhat cramped keyboard (with a hyperactive trackpad that is hard to avoid given the lack of space), but Moblin, itself, is pretty impressive, even though it's still very much in beta.
Having used various Linux "desktops" over the years (Canonical Ubuntu- and Novell SUSE-based, primarily), the thing that most impressed me about the Moblin experience is that it's nothing like traditional Linux "desktop" experiences. In fact, it's not really much like Windows, either.
The closest it comes to being a clone of anything is in paying tribute to some of the best Mac OS X features (like Expose), which perhaps isn't surprising given that Ubuntu's Mark Shuttleworth has suggested Linux must outdo the Mac to win.
One of my favorite things is the concept of the M-Zone ("Me-Zone"):
Diagram of Moblin's M-Zone
(Credit: Moblin.org)You can think of it as "home base," as it offers a central place to capture your recent activities (e.g., documents you've been working on, music you were listening to, etc.). Someone that had been using the machine before me had The Pixies geared up on Last.fm, which I simply clicked on and, Voila! "Monkey Gone to Heaven" started to play. Score one for Intel for knowing my musical tastes.
If that sounds business-y and grown up, I suppose it is, but Moblin is about much more than how to get one's corporate job done. Like the Mac, Moblin takes notice that life is more than corporate drudgery, and the UI reflects this. One part that I really liked was the "People" option on the Toolbar panel:
Moblin's People panel
(Credit: Moblin.org)This is a great view into instant messaging conversations and a reflection of Moblin's nod to the real life "work" that we do, and how we do it. Again, very similar to the Mac in its emphasis on "the other work" we do.
Over the next week or two, I expect to spend more time with Moblin, and to give neighbors, co-workers, and family time on the machine to see how they fare. Stay tuned.
Some are projecting that Linux will regain 50 percent of the Netbook market. Perhaps. But if so, it won't come as a result of the clone wars Linux developers have been promoting for years. It will come from the game-changing tactics that Moblin, now under the guidance of the Linux Foundation, and others bring to the personal computer party.
At present there are arguably too many mobile open-source platforms. Based on what I've seen with Moblin, however, it may well be the Linux distribution to beat in the mobile market, at least for Netbooks.
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In open source or in product development generally, one of the biggest mistakes is to take on a deeply entrenched incumbent on its own turf. Almost inevitably, if you play someone else's game, even if you're a little cheaper/faster/better, you're going to lose. Inertia favors the incumbent, and there's a whole lot of inertia involved in switching vendors.
For this reason, I agree wholeheartedly with Bill Weinberg's suggestion that Linux's opportunity in Netbooks is to focus on the mobile side of the market, rather than bringing a traditional, personal computer bent to the market.
Weinberg writes:
...(O)ne strategic error made by purveyors of Linux Netbooks was to covet the volumes of the global mobile telephony market while following the business models and channels of the legacy notebook marketplace. Linux fans--.orgs, Linux ISVs, and device OEMS--unfortunately approached the Netbook opportunity as a downward extension of the desktop and portable PC business, with volumes of 297M units in 2008 (IDC).
Instead, the Linux ecosystem needs to envision Netbooks (and MIDs and tablets) as building on the worldwide mobile handset business, with its 1.28B annual unit shipments (Gartner) the most lucrative slice of which, smartphones, constitutes 14 percent (ABI) with 20 percent annual growth rates.
Microsoft owns the traditional personal computer market, and probably will forever. But don't lose hope: the best strategies going forward are disruptive, in the Clayton Christensen sense. Microsoft is weak in mobile. This is where Linux proponents should focus their "desktop" strategies.
Apple is gaining on Microsoft in personal computers as much because of its iPhone revolution as its beautiful laptops. If Linux wants to win in Netbooks, and it can, it must do so by undermining Microsoft, not by confronting its desktop dominance directly. Netbooks must be more "Net" than "book," just as mobile phones are more about "mobile" than "phone."
If this is true, Google's Android, which is targeting smartphones first and Netbooks second, may have the upper hand on Intel's Moblin, which aims at Netbooks first, and is largely designed as a Windows replacement.
Malcolm Gladwell recently reminded the world that David beats Goliath with a sling, not a sword. Linux-based Netbooks, playing David to Microsoft's Goliath, should approach the market with a mobile bias, rather than with a personal computer bias.
"Hit 'em where they ain't," said Willie Keeler, which is as true in hitting baseballs as it is in competing with Microsoft.
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Google's still-nascent efforts to dominate the mobile market, already reeling from Apple's surging iPhone platform, were dealt another blow on Thursday when Intel and Novell announced that they will collaborate to promote Intel's Moblin operating system, a rival Linux distribution for mobile devices.
Whereas Google is initially targeting smartphones with Android (though an Android-based Netbook has apparently been released), Intel is targeting Moblin at Netbooks.
Additionally, Android and Moblin aren't simply two different Linux distributions, in the way that Red Hat Enterprise Linux and SUSE Linux Enterprise Server are. Android and Moblin use Linux in different ways, as Dirk Hohndel, Intel's chief Linux and open source technologist, suggested to me:
Moblin is Linux for mobile devices, (and its) first focus is on Netbooks. Android is an (operating system) for phones that uses a Linux kernel...very different.
Novell's Justin Steinman, vice president of solution and product marketing, said in a follow-up conversation:
Moblin 2.0 is the first open-source Linux software stack and technology framework designed from the ground up for the Netbook device type. Essentially, Moblin plans to start at the Netbook layer of the stack, and then work its way down to the smaller mobile devices. Given Novell's strength in delivering desktops based on Linux, it made sense for us to collaborate closely with Intel to deliver the optimal user experience on Netbooks.
Given Apple's rising dominance in smartphones and Symbian's lingering power in other mobile devices, this seems like a smart, strategic move. The Netbook market is still wide open, with Apple currently disdaining to enter it and Microsoft bleeding cash to hold its ground against Linux.
Though Ubuntu made the first forays for Linux in the Netbook market, could it be Novell and Intel that end up dominating it?
Maybe. Maybe not. The one sure thing, at least for now, is that Microsoft may win the short-term Netbook war, but it still needs a long-term, winning game plan for mobile.
The mobile market is fascinating because it is uprooting long-held beliefs about how and where to compete in software. Intel, Google, and Apple, each fiercely contending for dominance, share a common strategy: they're investing in the operating system but planning to make their money elsewhere (Atom chips, in Intel's case; advertising and revenue-sharing with application vendors, in Google's; hardware and revenue-sharing with application vendors, in Apple's).
Such strategies stand in stark contrast to Microsoft, which persists in trying to monetize its mobile Windows platform.
Small wonder, then, that Microsoft is losing the mobile battle. It's fighting with the wrong ammunition.
Back to Google. While it seems clear that Intel's Moblin initiative is an attempt to fend off Google's looming Android threat, there's probably enough time for Intel and Novell to stake out a strong position in Netbooks that Google will struggle to overcome.
Regardless, the one player left out in the cold in all this activity is Microsoft. Google, Novell, Intel, and Apple are each putting hefty resources into winning the mobile market, but doing so in a way that undermines Microsoft's traditional approach of licensing only the software. Microsoft's Xbox experience suggests that it can do hardware right, but will it be able to catch up if it starts chasing its competition?
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Microsoft has achieved something of a Pyrrhic victory against Linux-based Netbooks: it now claims 96 percent of the Netbook market, but its earnings continue to be battered by the lower revenues and profits that come with the low-end Netbook phenomenon.
Even as Microsoft "wins" in Netbooks, it loses, as ZDNet's Larry Dignan writes. Microsoft expects "the overall spending environment to remain difficult," but it may not yet appreciate just how much worse it can get.
After all, Canonical, which develops Ubuntu, the world's leading consumer-focused, Linux-based desktop operating system, on Monday released a Netbook-optimized Ubuntu distribution, as IDG reports.
Better battery life. A nicer visual experience. An operating system tightly tuned for applications like e-mail, Web browsing, and office productivity. All for a price that is dramatically less than Microsoft Windows...even after Microsoft discounts.
Microsoft's love-hate affair with Netbooks is about to get worse. Competition does that to a company.
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It's hard to be friends with an 800-pound gorilla without getting stepped on from time to time. It's perhaps not surprising, therefore, that some of Microsoft's closest Windows allies are reportedly seeking to undermine their hegemonic partner with Linux initiatives in Netbooks and laptops.
According to a report in The Wall Street Journal, Hewlett-Packard and other personal computer manufacturers are testing Google Android for Netbooks and other mobile PC devices in a bid to boost margins that otherwise get consumed by Windows license fees. These PC manufacturers are seeking to have more control and money in the growing mobile computing market.
While Microsoft has been dismissive of Linux in this and other consumer markets, it may have met its match in Google Android. There are two reasons.
First, as ComputerWorld suggests, Google's brand might be enough to carry Linux in the PC market. Consumers know Google. They might not proactively seek out a Linux PC, but a Google PC...? Feasible.
Second, Google can afford to seriously undercut Microsoft's Windows pricing because Google doesn't charge for Android. This is good for PC manufacturers that are looking to make more money in margin-squeezed Netbooks, and it's terrible for Microsoft for the very same reason. Google has shifted the competitive terrain under Microsoft's feet. By focusing value (and revenue) in the browser, Google has finally given Microsoft cause to fear the Linux PC.
Not to be outdone, Microsoft's primary partner for Linux interoperability, Novell, is setting up a Taiwanese R&D team to focus on improving Linux for Netbooks.
If Microsoft can't count on Novell and its PC manufacturer partners to play nicely, who can it trust?
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In the process of pillorying the intelligence of buying Macs in the recession, Microsoft CEO Steve Ballmer may have admitted defeat in fighting Linux-based Netbooks. Ballmer said:
Paying an extra $500 for a computer in this environment--same piece of hardware--paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be.
But if this reasoning is sound against the Mac, doesn't the same apply to Microsoft in its competition with Linux? Glyn Moody thinks so:
This is a very frank analysis of the problem for Microsoft: after all, who's going to pay extra money just to get the Windows logo on a Netbook, when they can get the same features for less with free software?
What goes around, comes around. Indeed, Canonical's Ubuntu distribution already claims fealty from a host of OEMs (original equipment manufacturers) like Dell and Hewlett-Packard, with more signing on, and Novell also has scored some considerable points on the Netbook.
Even if consumers and businesses don't opt for Linux on their Netbooks, the Windows they're choosing is not very profitable for Microsoft, and getting users to upgrade to a pricey Windows 7 could prove to be a fool's errand, as Microsoft admits. Microsoft may well end up winning the Netbook war against Linux and losing at the same time.
Why pay a few hundred dollars for Windows on a device that costs only a few hundred dollars and drops all the time? The economics of the recession may help Microsoft against Apple, but they're no help against Linux-based Netbooks.
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Revolutions don't always roil and boil toward a noisy, violent fracas. Sometimes they don't even ripple the surface.
Such is the Ubuntu Netbook revolution, which makes waves in the Linux community--and really nowhere else. Not publicly, at least.
I was fortunate to spend two hours on Tuesday night with Chris Kenyon, head of Canonical's Ubuntu business for original-equipment manufacturing, or OEM. Kenyon, in addition to being a fellow Arsenal fanatic, is also Ubuntu's point man for its quiet, but nonetheless dramatic, Netbook revolution.
Kenyon, who appeared a placid, affable chap when we first met outside Arsenal stadium to witness a shattering of Hull City's FA Cup hopes, eventually let his competitive side out during the match, cheering the team and jeering the referee. Brilliant. It was then that I got a taste for what Canonical's competitors, and particularly Microsoft, might be in for when competing with Ubuntu.
In the Netbook market, Ubuntu is the clear winner, with Hewlett-Packard, Dell, and the other major hardware OEMs shipping Ubuntu-based Netbooks. But it's not yet clear what "winner" means. Microsoft, after all, still apparently claims 90 percent of all Netbooks shipped with Windows.
Therein, however, lies the seed of Ubuntu's revolution. Ten percent market share for Linux is pretty incredible. We rightly cheer Apple for its steady onslaught of Microsoft in the personal-computing market, and that's as Apple struggles toward 10 percent market share. Linux is already there in Netbooks, and Ubuntu claims the bulk of those installations.
There are indications that this could accelerate. I won't comment on the royalties Canonical currently earns on its Netbooks, except to suggest that its competitive price point must be extraordinarily expensive...to Microsoft. Manufacturers continue to ship Windows XP and pay Microsoft virtually nothing for the privilege due to discounts, rebates, and other incentives. With Ubuntu exerting downward pricing pressure, Microsoft doesn't stand to gain much in the growing Netbook market.
Let's say Microsoft earns $8 per copy of Windows XP shipped, which might actually be high, at least with the larger OEMs. At that point, the price differential between shipping Ubuntu or Windows XP is slim. But once Microsoft eventually turns off the XP spigot and requires OEMs to ship Windows 7, will Microsoft be able to command a hefty premium on its brand alone?
I doubt it. Canonical has permanently reset the Netbook operating system price point in its favor, at a level where it can compete vigorously while Microsoft must compete reluctantly. Microsoft, in short, is now playing by Ubuntu's terms.
Now let's compound the problem for Microsoft. Taiwanese original-design manufacturers are actively deploying Ubuntu for their OEMs (HP, etc.). They are now gaining experience and expertise in testing and quality assurance for Ubuntu. The mechanics of shipping Linux, in other words, are beginning to be well-understood. This, coupled with consumers' growing comfort with Linux in the Netbook form factor, make it hard to justify the inertia of staying with Microsoft just because it's Microsoft.
Netbooks are disruptive, in part, because they define productivity in terms of the Web, not Microsoft Office. The more users want to spend time in a browser, or instant messaging, or e-mail, the less Microsoft Windows is required. The less Windows is a requirement, the less that OEMs are going to be willing to pay for Windows licenses. Microsoft suffers (indeed, it may already be suffering), OEMs gain (because they earn better margins on their Netbooks), and customers gain (all the functionality they need at an attractive price).
And, of course, Canonical gains. There's a revolution going on. It's quiet, but it's happening.
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