coupland's Journal: Antitrust + Linux = Trouble for M$

I spend a lot of time thinking about the computer industry. I work in it, so naturally it's on my mind, and the sordid goings-on between Linux, Microsoft, SCO, Novell, IBM, and Oracle make your average soap opera seem boring. I spend a lot of time trying to guess how the whole story will play out (will Darl find out that what he thinks is his baby is really the illegitimate love child of Linus and PJ?!?!) And usually my guesses are pretty close to the mark. Which is why I was so surprised a few minutes ago to realize that there are two important hypotheses I've had in recent years that I mulled over, qualified, classified, and filed -- right next to each other -- without realizing they were directly connected. And that they mean trouble for Microsoft.

Firstly, when the whole anti-trust thing was in full swing and Penfield-Jackson hadn't yet pissed the whole thing down the toilet, I began to think about the antitrust proceedings against IBM. I long thought that the outcome of the antitrust hearings against Microsoft were irrelevant, much like they were with IBM. You see, even though IBM was exhonerated, the antitrust investigation still brought them down. Partners and competitors that had been under their thumb for years realized that the giant was not all-powerful and started to revolt. They started to refuse to do things (even smart things) just because they were asked to by IBM. Look at the failure of the 2.88MB floppy disk -- an entirely good idea that never caught on because it was by IBM. I believed that Microsoft was in the same position: that the outcome of the antitrust lawsuit was immaterial because a lot of companies were waiting for them to get their comeuppance and now was their chance.

Unfortunately the end result of the whole antitrust debacle was that Microsoft essentially received carte blanche to do whatever they like, for however long they like. I was disappointed and walked away feeling like Microsoft had "won".

The second idea I had been batting around was that Linux was the first really credible threat to Microsoft in years. There was no company for them to "beat", there was no price for them to undercut, *and companies were throwing their support behind Linux simple because it's not Microsoft*.

Really, I've been staring the anti-Microsoft backlash in the face for years without recognizing it for what it was. Microsoft is vulnerable, and the industry knows it. They're tired of being pushed around and they're not gonna take it anymore. And supporting Linux, not in spite of Microsoft, but *to* spite them, is their way of lashing out. They don't even care if it hurts them in the short run, they're out to put the hurt on the *new* "Big Blue".

That having been said there are some significant differences between old IBM and Microsoft. For one thing, even at its worst Microsoft is executing far, far, better than old IBM was. old IBM was a farce and a laughing stock. "Weak as kittens, dumb as a sack of hammers." Microsoft is not making the mistakes that IBM did.

Secondly, Microsoft has 50 billion dollars in the bank. As long as they are executing well and have 50 billion dollars from which to draw, there will be no precipitous fall. They could abandon software entirely, switch to athletic shoes, and would probably do well. No really, I mean it. Bill Gates squirreled away 50 billion in cash because he's seen it happen in this industry where your market just *vanishes* overnight. He keeps that cash reserve so that if that ever happens they can recover from it with barely a scar.

So while I'm not predicting the death of Microsoft, what I am predicting is that Linux will continue to grow and prosper, to the detriment of Microsoft. This growth won't even follow the traditional rules of free markets since companies will support it, improve it, and deploy it simply because it's not Microsoft.

And *I've* got to stop leaving these thoughts in my head collecting dust -- some of them are dying to get out and meet each other.