June 2005

How Linux Could Overthrow Microsoft

The open-source movement is the largest threat the software giant has ever faced. Does Bill Gates have a plan?

By Charles Ferguson

For as long as most technologists can remember, there has been "Wintel," the $250 billion industry dominated by Microsoft's Windows operating systems and Intel's microprocessors. But "Lintel," or the Linux operating system and Intel, is now encroaching on this empire, and behind it is the entire open-source software movement, which threatens to overthrow the Windows industry. Faced with this challenge, Microsoft is showing classic symptoms of "incumbents' disease." Rather than remaking itself, Microsoft is using legal threats, short-term deals, and fear, uncertainty, and doubt to fortify its position. But this strategy probably won't work. The Linux operating system and the open-source model for software development are far from perfect, but they look increasingly likely to depose Microsoft.

With some improvements, the open-source model could even become the dominant global production model for software. If it does, it will be an irony. The open-source movement was launched 20 years ago by an antiestablishment technologist and for years was ridiculed by the mainstream computer industry. But it quietly drew more adherents every year, spreading first among iconoclastic hackers because its legal structure and culture offered them freedom from "the suits" -- that is, the entire managerial, financial, and legal apparatus of the commercial technology sector. But now IBM, Hewlett-Packard, and Intel have become supporters of Linux and open-source development. Their goal is to reduce Microsoft"s prices and power by commoditizing mass-market software.

If that happens, it will be a further irony. Microsoft achieved dominance by imitating the products of others, encouraging the copying of the IBM PC and cannibalizing the proprietary computer industry. But now a revitalized IBM, aided by Hewlett-Packard, Dell, Intel, and Oracle, is fomenting revolution, while Microsoft increasingly resembles the old IBM, an entrenched monopoly that survives by forcing the world to buy its high-priced, aging, increasingly bloated products. (Microsoft said in April that one server product will run Linux -- a symbolically significant concession, but hardly a sign that the ship is turning.)

How open source will fare without an enemy like Microsoft is one of several open-ended questions it must face. But then, it's always faced open-ended questions, and those questions always, somehow, get answered. Indeed, at a recent conference, Linus Torvalds, the inventor of Linux, was asked about his long-term vision for it. He replied that he was an "anti-visionary." When people looked too far into the distance, Torvalds said, they missed things in front of them and stumbled. In fact, the next step for Linux is obvious: it is becoming big business, fast.

This because for all its flaws, the open-source model has powerful advantages. The deepest and also most interesting of these advantages is that, to put it grossly, open source takes the bullshit out of software. It severely limits the possibility of proprietary "lock-in" -- where users become hostage to the software vendors whose products they buy -- and therefore eliminates incentives for vendors to employ the many tricks they traditionally use on each other and on their customers. The transparency inherent in the open-source model also limits secrecy and makes it harder to avoid accountability for shoddy work. People write code differently when they know the world is looking at it. Similarly, software companies behave differently when they know that customers who don"t like a product can fix it themselves or switch to another provider. On the available evidence, it appears that the secrecy and maneuvering associated with the traditional proprietary software business generate enormous costs, inefficiencies, and resentment. Presented with an alternative, many people will leap at it.