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Microsoft’s 800-pound gorilla

August 26, 2011

Yes, I know LinuxCon has come and gone, and I think they’ve got the publicity thing covered, especially with the 20-year thing, the gala party, and with Linus being there and all. The buzz is still going, and that’s good. But if you’re going to a Linux show, make it the Ohio LinuxFest in September. Bradley Kuhn and Cathy Malmrose are keynoting, so you’ll not want to miss that (especially Cathy — Go ZaReason!)

You might think from the title that this is a blog item about Steve Ballmer. Well, this blog item is about an 800-pound gorilla sitting in the middle of Microsoft’s living room, but it’s not that gorilla.

Microsoft fanboys and fangirls have been in a pants-wetting frenzy over the recent Microsoft 10-K filing with the Securities and Exchange Commission, in which Microsoft removed Linux as a threat in the document. The implication here to the uninitiated is that Microsoft is no longer worried about Linux or, even more misguided, that Microsoft has “won” its battle with the “cancer” they call Linux.

But as Paul Harvey might say, here’s the rest of the story.

A corporation files a 10-K every year and, in it, outlines some of the pitfalls that the corporation may encounter during the course of the year. Not only is it law, but it’s also clearly a cover-your-buttocks mechanism by which corporations can say to stockholders, “See? We told you there were risks, now that our stock tanked” (if that’s indeed what happens).

In 2008, this was in Microsoft’s 10-K report filed with the SEC:

“Our business model has been based upon customers paying a fee to license software that we developed and distributed . . . . In recent years, certain ‘open source’ software business models have evolved into a growing challenge to our license-based software model. Open source commonly refers to software whose source code is subject to a license allowing it to be modified, combined with other software and redistributed, subject to restrictions set forth in the license . . . . A prominent example of open source software is the Linux operating system. Although we believe our products provide customers with significant advantages in security, productivity and total cost of ownership, [blogger’s note: OK, try not to laugh too hard here] the popularization of the open source software model continues to pose a significant challenge to our business model including continuing efforts by proponents of open source software to convince governments worldwide to mandate the use of open source software in their purchase and deployment of software products.”

[As an aside, I wrote a blog item about this in 2008 and I have received multiple hits on that item every day ever since. Every day.]

For 2011, it seems the 10-K adds other factors that would hinder Microsoft. It removes the language that considers Linux a threat and replaces Linux and FOSS with Apple and Google, according to Brian Proffitt’s article on the same issue, “Microsoft disregards Linux as threat. Big mistake.” Brian’s article has a red-lined version of this text, if you want to take a look.

Is it me, or is this a textbook frying-pan-into-the-fire situation? I mean, having to fight Linux and FOSS for market share is one thing — and Windows, um, advocates like to parade around the fact that Linux only has 1 percent of the desktop market, if that.

But now, with Microsoft having to face off with Apple (which is in far better financial straits than Microsoft) and Google (which is in the same excellent financial straits as Apple and far better financial straits than Microsoft), I have to ask: Are the happy-dancing Windows fanboys/fangirls who are so happy about Linux being “vanquished” really that stupid? Would you rather face two stronger adversaries than one smaller one?

With their most recent 10-K filing with the SEC, Microsoft has done the regulatory equivalent of sticking their fingers in their ears, closing their eyes and shouting, “La, la, la — I can’t hear you.”

As Brian points out in his article, Linux is not really out of the picture when it comes to affecting Microsoft’s bottom line. Google’s ChromeOS is Linux and . . . um, there something I’m forgetting about how Linux is trouncing Microsoft in an area where Microsoft can’t get a foothold. Wait, it’ll come to me.

Oh yeah: Android. Based on Linux, Android is cleaning everyone’s clock in the mobile realm, including Apple, and is light years ahead of Microsoft in a category where Microsoft has yet to leave the proverbial runway. Need I say more?

So Microsoft can put a red line through Linux and FOSS and tell the SEC that Linux no longer matters, while Windows partisans pop their corks and chalk up another one for their side. Meanwhile, back on the planet Earth, the reality is much different.

This blog, and all other blogs by Larry the Free Software Guy and Larry Cafiero, are licensed under the Creative Commons Attribution-NonCommercial-NoDerivs CC BY-NC-ND license. In short, this license allows others to download this work and share it with others as long as they credit me as the author, but others can’t change it in any way or use it commercially.

[FSF Associate Member] (Larry Cafiero is one of the founders of the Lindependence Project and has just started developing software in his new home office. Watch this space.)
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  1. John Eddie Kerr
    August 27, 2011 at 6:03 am

    Great article, but lest we forget, take Linux out of the equation (it never happened) and there is no Google, there is no Bing.

    Come to think of it, there is no all kinds of great things,

    • August 27, 2011 at 7:22 am

      Excellent point, and thanks.

  2. Markus
    August 27, 2011 at 8:21 am

    If you check e.g Wikimedia statistics you will found Linux marketshare about 3% and growing fast. W3schools are showing over 5% for Linux. However the global truth about Linux marketshare is more likely over 5%.

    These “1% statistics” are nothing but per-per-click comercial statistics. Hardly any Linux-user are visiting these sites. Statscounter and Net Application numbers are just pure joke.

  3. colonelpanikBob McKeand
    August 27, 2011 at 9:36 am

    Sitting in the hall at Bubonicon: http://bubonicon.com/
    Just listened to a bunch of very well known authors talk about
    the possible bad side effects of the digital age. Loss of data,
    loss of our mental abilities (as if we ever were really all that smart?)
    loss of knowledge of how to do things, shoeing a horse or maybe
    how to print a news paper. Horrible horrible outcomes were
    covered, the apocalypse squared at least. But, and this is the
    big butt, none of them want to go back to the old ways. w00t

    ms says we, that is Linux, is not a problem, so we won?
    Larry, tell me again about that world domination thing.

    Peace, Bob

  4. amy
    August 27, 2011 at 12:28 pm

    The numbers of Linux users on the desktop might be one area where speculation on actual numbers is rife, however going back even just a few years, the description of “desktop” would not have included phones and probably not tablets either, yet here we are today quoting figures which do; in just five more short years, an individual’s “desktop” may comprise something different. If one were to widen the field to encompass open-source software, a field in which MS is also a participant (possibly after much room-pacing and floor-furrowing), then the figures would explode. Limiting ourselves though to just Linux, but again widening the field to beyond a person’s definition of “their desktop”, the numbers will be much, much larger than >90% of individuals would perceive, and since Linux development has never really limited itself to the “desktop”, the outcome is hardly surprising, and really just shows where the Linux development mindset is at.

  5. August 28, 2011 at 12:21 pm

    Does that mean that Microsoft doesn’t care about the server market anymore? heh 😀

  6. jackd
    August 28, 2011 at 1:00 pm

    Larry, You didn’t actually read the filing, did you? Where, exactly, does it say Linux no longer matters?

    It would have taken you less time to read read the filing than it did to write this silly post.

    FUD is FUD. No matter which side it’s coming from. (And, btw, you’re not very good at it.)

    • August 28, 2011 at 2:00 pm

      I’m not saying that Linux doesn’t matter to Microsoft — Microsoft executives and bloggers are saying that.

      But tell you what, Jack, let me point you to two documents:

      First, there’s Brian Proffitt’s article here: http://www.itworld.com/mobile-wireless/192879/microsoft-disregards-linux-threat-big-mistake — there’s a redlined version of the 10-K there.

      But don’t stop there — take a look here at this Windows blog that has a link to the 10-K, in .docx format: http://www.winrumors.com/microsoft-accepts-apple-and-google-as-main-mobile-and-desktop-competitors/ You’ll find if you look at the 10-K document, I mean actually read it, you’ll see that it says the same thing that Brian Proffitt points out. Can’t find it? Do a search for “the Windows operating system faces competition.”

      Thanks for the compliment, by the way. I’m glad I’m not very good at FUD because, frankly, I don’t think I practice spreading it.

  7. mcinsand
    August 29, 2011 at 4:52 am

    If I was an investor in MSFT and had any IT awareness (as oxymoronic as those two conditions may seem), I would be incensed and, depending on the degree of investment, considering a call to an attorney. Given the growth of Linux’ market penetration through tablets and, particularly, with Android as a vehicle, the threat to MS’ business model ias increased substantially. How many handies use Win-7-phone versus Android? A 10k report is supposed to include market conditions summarized as accurately as possible; this is fraud, and anything but donkey-covering.


  1. August 27, 2011 at 2:36 am
  2. August 27, 2011 at 9:33 pm
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