Wednesday, November 08, 2006
Microsoft and Linux? Weird!
Microsoft and Linux? Weird!
I think this $240Million dollar agreement between Microsoft and Linux is one of the most interesting deals this year. Nothing tops this one.
Linux has long been the getaway from Microsoft’s capitalistic crusades. The majority of Linux users have issues with Microsoft’s business practices rather than its software.
Linux is an open source operating system which is used by just a small percentage of the population, mostly hardcore techies. Linux is also used on hundreds of thousands, probably closer to millions of servers, worldwide. It is the operating system of choice for businesses and other establishments which desire the fastest and most efficient operating system for their hardware.
As we all know, Microsoft and Google have been involved in an extreme turf war. Google has owned the internet ad industry outright and Microsoft has owned the software arena since the beginning. Both companies are attempting to partner with any company possible in order to create something new and valuable for investors.
Google has been working alongside mozilla to promote the firefox browser. Due to firefox being a faster and more secure browser and internet explorer (Microsoft product) getting worsening press coverage, many people have moved to firefox as their browser. The new internet explorer contains features that firefox users have been enjoying for years. Tabbed browsing is the biggest feature that IE lacked for the longest of time. Tabbed browsing makes it possible for firefox users (and now IE users) to browse multiple web pages with just one open browser window. This limits cluttering your screen with multiple browsers and helps surf more efficiently through web pages. Tabbed browsing allows the user to read one page while another loads. I used tabbed browsing all the time, it allows me to get much more work done!
Google has had all their, what I call “Nifty,” software released as freeware. I think it is mostly done as a marketing proposition for Google. Each user of gmail, Google earth, or desktop Google will be more likely to use Google as a search engine because of their extensive exposure to the Google name.
Most of the files that Google releases really aren’t absolutely necessary programs. Google Earth is honestly one of the most worthless software programs I have on my computer. Sure, it makes for hours of fun looking at all the things most people will never see in their lifetime, but for practical purposes it really doesn’t serve a use.
Many people, especially bloggers, have speculated that Google would release its own operating system and even a super cheap computer meant to take on Microsoft. Obviously this new operating system would need a base for comparison or even an existing operating system to be used as a frame for the new operating system. Linux would have been the perfect operating system for this role. It is light, open source, and could be modified to put any Google software under the sun on it.
The main reason I think Microsoft chose Linux as a target was to invade Google’s “turf.” Many people, including myself, wanted to see Google turn Linux into its own operating system. A Google operating system would mean a free operating system, compatible with any computer that could be put into mainstream computers practically overnight.
Google has plenty of bandwith in which to distribute copies of Linux fully loaded with its own programs and resources.
The makers of Linux are set to make a killing with the new partnership. The company now has $240 million in order to promote its own business ventures and software. The small company has the prospect of joining companies like Microsoft in the closed source software market. In reality, Microsoft could be funding a company that eventually takes on Microsoft. The two are in relations now, but when 2012 rolls around and the agreement expires, I think Linux will emerge as its own software company.
This new agreement with Microsoft works awesomely for Linux. Just from the press alone, Linux is set up to receive many more inquiries for its fledging operating system. Since the announcement I don’t think a day has gone by that I haven’t heard about the agreement. Press is always good for Linux, which has gained is popularity mostly from those who left Microsoft products in order for more stable operating systems such as Linux.
I wonder if we are getting to the point where we have to pay for Linux. Linux has long been the open source operating system of choice, however at any time Linux could close up shop as a free software and become pay per license. Or even ad-based!
Linux offers an awesome operating system for companies which I’m sure would pay for the right to use its software. The home user is starting to become more acquainted with open source software and Linux could become a household name in the open source industry.
If Linux did become software that was pay per license, how much would we, as the users, pay? Microsoft XP currently sells for a whopping $200, why wouldn’t users be willing to pay $50 for a copy of Linux, which is faster and less computer demanding. Plus all of the applications that are available for XP are starting to make their way to linux operating systems.
The agreement between the two may spark some trouble with Apple sales. Microsoft can now offer the best of both worlds, a free open source operating system, and a full blown XP and Vista with every bit of software needed. While I do thinks this is a play against Google, Apple Computer will have to respond.
So what happens to the Old Linux users?
Linux used to be the refuge from Microsoft and its business practices. The super nerdy or “technically inclined” usually have at least one computer running Linux in order to run all of the high tech, hacker type programs.
I think Linux may lose some of their high tech following because of their partnership with Microsoft. But also I think it is safe to assume that they will pick up many more typical computer users who aren’t exactly computer inclined but have large pocketbooks.
Financially, this $240 million dollar deal was an absolute drop in the bucket for the coffers of Microsoft. Microsoft is the most valuable public company so $240M to defend its domain would be a wise investment.
Don’t expect shares of Microsoft to drop because of this $240M expense. Its really not much at all to Microsoft.
For the investor:
I do not recommend buying shares of Microsoft simply because of its value. Microsoft is worth too much money to grow at rates that are higher than the overall markets. It takes several billion dollars in market cap to move Microsoft just a few percentage points. This kind of drain means that Microsoft will never been a very volatile stock and for the long term investor, it probably wont return near as much as the overall markets.