Why Microsoft fears Linux

I've been writing a series of blogs explaining that Linux has reason to fear Windows 7, because it may kill Linux's market share. But there's also plenty of reason for Microsoft to fear Linux, which is why Microsoft is looking to Windows 7 as a Linux-killer.

In my blogs, I've explained that Microsoft has made Windows 7 lean specifically so it can run on netbooks. As evidence, I've pointed to ASUS CEO Jerry Shen saying he plans to release versions of the Eee PC powered by Windows 7 in mid-2009. And I've pointed out the fact that the return rate for Linux netbooks is at least four times as high for Linux machines as it is for XP ones for at least one netbook maker.

What I didn't write about in detail, though, was why Microsoft felt it was so important to make Windows 7 lean in the first place: The skyrocketing growth of Linux on netbooks.

An article by Bloomberg does a great job of digging up statistics about Linux versus Windows on netbook, and it's sobering for Microsoft. It finds that:

Acer Inc. and Asustek Computer Inc., which together account for 90 percent of the netbook market, are using the rival Linux software on about 30 percent of their low-cost notebooks.

More disturbing still, the article says, is that

Netbooks will account for about a third of PC growth this year, according to Citigroup Inc. Shipments will climb at an annual average growth rate of 60 percent and reach 29 million units in 2010, compared with 18 percent growth for standard notebooks, according to a September BNP Paribas SA report.

Microsoft isn't just worried about ceding 30 percent of the netbook market to Linux. It's also worried that if people get used to Linux on netbooks, they'll consider buying Linux on desktop PCs. Here's what Dickie Chang, an analyst at research firm IDC in Taipei, told Bloomberg about that:

It's a real threat to Microsoft. It gives users a chance to see and try something new, showing them there is an alternative.

It's clear, then, that Microsoft sees Linux on netbooks not just as a niche market, but as a threat to Microsoft's desktop share as well.

That's why when Windows 7 is released, Microsoft will spend substantial amounts of marketing muscle pushing Windows 7 on netbooks. Expect it to go well beyond mere advertising. Expect price cuts and rebates for Windows 7 netbooks, special hardware on them, and more. All that money will eventually have an effect: Linux share of netbooks will go down, and Windows share will substantially increase.

Preston Gralla is a contributing editor for Computerworld, and the author of more than 35 books.

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