Will it always be a Microsoft Windows world? That’s what I hoped to find out when I sliced open the box containing the new PC I’d ordered from WalMart.com. It had a respectable 1.6-gigahertz processor, a serviceable 40-gigabyte hard drive, a CD-ROM drive, an MP3 player, and enough other software to keep me occupied for life, though supporting it all was a barely adequate 128 megabytes of RAM. Okay, I knew this chunky black box wouldn’t be the sexiest PC on my block. But that was fine, considering its paltry $278 price tag – and that I’d really ordered it for what it didn’t have: any Microsoft software whatsoever. Rather than Windows and Office, it came with Linspire 4.5, one of the many commercial versions of the open-source Linux operating system that are now available, and a link to a website where I could download a variety of open-source applications. n When I plugged in my Wal-Mart machine and hit the power button, I got a look at an alternate future that ought to be fueling Pepcid sales among Microsoft executives. The computer featured a glamorous new desktop screen and sophisticated control panels, help menus, and audio tutorials. I was instantly able to connect the machine to the Internet, where I downloaded – free of charge – open-source equivalents of the Microsoft Office programs I use every day: Word, Excel, PowerPoint, and Internet Explorer. The free software may not have all of Office’s bells and whistles, but the version of it I chose, Open Office, does everything I need it to do – including saving files in Word format.

The back-office world of servers and databases is no longer Linux’s most exciting frontier. Sure, Linux has gained an irreversible hold in behind-the-scenes corporate computing centers, where some 67 percent of corporate Web servers are Linux machines running open-source software. Companies from Schwab and Merrill Lynch to L. L. Bean and Pep Boys have converted parts of their back-office operations to Linux, and IBM, Oracle, and other companies are spending millions to make their own business software run on the operating system. But over the last three years or so, the capabilities of open-source software have finally caught up with those of Microsoft applications in the space where most human-computer interaction actually occurs: the desktop. “For the user who spends 50 percent of the time in the Web browser and another 40 percent in the mail client, the Linux desktop is already there,” says Andy Hertzfeld, an open-source programmer famed for his work on the original Apple Macintosh operating system.

True, Microsoft still commands 94 percent of the market for PC operating systems. But Linux is gaining fast. Software that gives a Linux machine the look, feel, and functions of a Windows PC is available both in free, unsupported versions and in souped-up commercial versions from a growing group of companies such as Novell, Red Hat, Sun Microsystems, and Lindows, the company that makes the Linspire system. In Toronto, customers can walk into the world’s first retail Linux store, Sub500.com, and walk out with a Linspire workstation for as little as $222. Over the last three years, the fraction of home and office PCs powered by Linux has roughly doubled, to almost 3 percent, and it’s set to double again before the end of 2005, according to market research firm IDC. Linux’s market share has already surpassed Apple’s, and every 1 percent gain for Linux sucks millions of dollars a year out of Microsoft’s revenues. Much of that money stays in the pockets of businesses and consumers (see “Open Source Sizzles,” this page).

And while Microsoft isn’t panicking, in an April presentation to financial analysts, the company put Linux and noncommercial software at the top of a list of “key business risks” that could affect its earnings in the coming years. To control those risks, Microsoft is pursuing a variety of tactics, including launching an anti-Linux marketing campaign and sharing some of its own source code in an effort to keep programmers interested in developing Windows applications.

But whatever Microsoft does, the flowering of open source on the desktop seems certain to change the balance of power in personal computing. Linux’s availability is already driving price reductions – even for Windows machines – that are opening up computing and the Internet to millions around the world who would otherwise be unable to afford PCs. Inside businesses, open source is helping IT departments cope with today’s smaller budgets and freeing up money that can be reinvested in new technologies. And for home or office users, open source offers a range of free, often innovative desktop applications that aren’t available for Windows.

It’s all enough to have Linux proponents feeling a little cocky. Jokes Eric Raymond, a Malvern, PA-based programmer who leads a nonprofit open-source standards group called the Open Source Initiative, “The sinister plan for world domination is right on schedule.”

The Open Office

You probably already use Linux more than you realize. Every time you run a search at Google or place a bid at eBay, for example, you’re tapping into databases spread across thousands of Linux servers. In 13 years, the software has come a long way from the dorm room in Finland where Linus Torvalds, then an undergraduate at the University of Helsinki, built on ideas borrowed from AT&T’s Unix operating system – and on the work of the GNU open-source project – to create something faster and more streamlined than either Unix or Windows. Torvalds invited other programmers to copy, use, and improve his offering, as long as they agreed to share any changes they might make, and he has been the movement’s unofficial regent ever since, approving every new line of code.

But while Linux started out as a program written “for hackers by hackers,” in Torvalds’s words, that era is long past. Torvalds himself is now paid by an industry consortium, the Open Source Development Labs in Portland, OR, to oversee Linux’s evolution. And the typical open-source programmer, apparently, is no longer a passionate hobbyist but a full-time professional at a company that either publishes or uses open-source software. At IBM, for example, 7,500 programmers are making the company’s business software run on Linux, which many customers see as more reliable and less virus prone than Microsoft’s products. Former networking company Novell recently purchased Ximian, a startup founded to build desktop Linux components (see “The Linux Revolution, Part I,” p. 44). “The more we have embraced the market, the more vigorous our culture has gotten,” says Raymond. The result: improvements in Linux’s capabilities that have facilitated wide adoption by business.

But that, as my Wal-Mart box testifies, is just the beginning. After all, every one of the 187 million new PCs that will be purchased this year (at a cost of some $213 billion, according to research firm Gartner) needs an operating system and productivity software. Creating easy-to-use, point-and-click interfaces for Linux and open-source applications has become “the one goal that everybody wants to achieve,” says Andrew Morton, Linus Torvalds’s second-in-command at the Open Source Development Labs. And that goal is now close enough to convince many organizations that it’s time to switch.

OpenOffice is a core reason for the ascension of the Linux desktop. Based on initially proprietary software that was later made open source by Sun, it includes a word processor, a spreadsheet program, a presentation builder, and an image editor and has become one of the most popular open-source alternatives to Microsoft’s productivity software. Companies such as Novell and Red Hat distribute it along with their own versions of Linux, and Sun sells an enhanced version called StarOffice. The key feature of OpenOffice is that it behaves pretty much the same way users of Windows software would expect – which means that any number of people could, in principle, become Windows defectors the next time they or their companies buy new computers or upgrade aging software.

Leaning toward Linux

Exactly how many of the people junking their old Windows machines will actually switch to Linux boxes? That depends on which group you’re talking about. First there are the casual home users: those who use their computers mainly to surf the Web and exchange e-mail and the occasional digital photo with friends and relatives. “They are going to look for the lowest-cost machine available to them,” says Dan Kusnetzky, vice president of systems software research at IDC. Several existing Linux-based programs, such as OpenOffice, “would be more than sufficient in that category,” he says.

Another group ripe for migration to the Linux desktop is corporate employees who use their office computers for just one or two tasks throughout the day. “Help desks, call centers, IT departments, receptionists, shipping and receiving – jobs where all somebody needs is a browser and Web-based e-mail – that one-third of your people could go to Linux today,” says Stuart Cohen, CEO of the Open Source Development Labs. And that’s a substantial one-third: U.S. call centers alone employ 2.9 million agents.

If lower software costs are attractive to corporate executives, they’re doubly so to government managers, another growing constituency for open-source desktop software. In cities as small as Largo, FL, and as large as São Paulo, Brazil, governments are saving millions by choosing Linux and free productivity programs over proprietary desktop software (see “Going Global,” p. 56). Other organizations and government agencies opt for Linux because they’d rather not hitch their futures to a single software company – especially a foreign company. In China, for instance, the State Council has instructed government ministries to buy Chinese-produced software the next time they upgrade their desktop systems, a mandate that is expected to be a big boost for Red Flag, China’s leading Linux distributor. In June, the city of Munich, Germany, affirmed its decision to switch 14,000 city-owned desktop PCs from Windows to versions of Linux supplied by IBM and Novell, even though Microsoft had offered discounts worth millions of dollars. “It’s not so much an anti-Microsoft feeling as it is not wanting to be dominated by an American company or by any one company,” believes Matt Asay, director of the Linux business office for Novell.

There’s one more big draw for Linux adopters: wider access to innovation, meaning software that Microsoft doesn’t sell or hasn’t gotten around to finishing. One open-source project called Dashboard, for instance, ties together disparate types of information desktop users juggle every day; it monitors whatever you’re doing on your computer and plumbs your e-mails, appointments, contact lists, and file folders for related items, automatically linking to them from a box that appears at the side of the screen. Microsoft developers have talked about including such features in the much anticipated successor to Windows XP, code-named Longhorn, but commercial delivery remains two or more years away. Says Louis Suárez-Potts, project coordinator and business manager in Berkeley, CA, for the OpenOffice project, “Open source is the ticket out of the banality Microsoft has imposed.”

The Empire Strikes Back

In the software industry, those are fighting words. Until now, Microsoft has had little reason to get stirred up about Linux’s gains, which have come largely in the business server market and largely at the expense of Unix and Sun Microsystems’ Solaris operating system. But the markets for desktop operating systems and office software – which together bring the software giant more than 60 percent of its revenues – are Microsoft’s to lose, and both sides know it. “The outfit that runs 94 percent of the [desktop] space believes correctly that it can’t live with us,” says Raymond. “It’s us or them, and we want to make sure it’s us.”

In public statements, Microsoft officials still downplay the open-source threat to Windows and Office. “Quite frankly, we’re not seeing evidence that Linux or open source is making significant traction in the corporate desktop market,” says Alan Yates, Microsoft’s senior director of business strategy.

The company’s actions, however, bespeak a much higher level of concern: it has begun slashing prices and even mimicking the open-source movement’s own tactics, opening up portions of its closely guarded code to outside inspection.

In Thailand, for example, where Linux PCs from Thai firm Laser Computer are the top-selling brand, Microsoft last year created stripped-down, Thai-language versions of Windows XP Home Edition and Office XP and offered them as a bundle for about $37 – about one-sixteenth of their combined U.S. retail price. The company is trying similar markdowns in Malaysia, another Linux stronghold, and is considering offering cut-rate software packages in other developing countries.

While there’s no talk of Thai-style price reductions for Windows software in the United States, WalMart.com does offer a PC with Windows XP Home Edition for $298, and Microsoft has launched a major publicity campaign asserting that the cost of retraining and support means switching to Linux and open-source applications is actually more expensive than sticking with Windows, especially for large organizations. Microsoft’s recent moves add up to an acknowledgement that the company must now compete – and perhaps even coexist – with the open-source movement. “There is no one correct way to create software,” acknowledges Jason Matusow, who directs Microsoft’s Shared Source Initiative, a two-year-old program under which more than a million software developers and corporate customers can view – but not copy or redistribute – the code behind Windows and 16 other programs.

Matusow says Microsoft’s limited form of open source helps customers integrate their own in-house software with Windows and brings Microsoft developers more direct feedback about bugs and needed features, but without giving away the company’s core asset: its intellectual property. He believes that the proprietary and open-source software worlds can exist in symbiosis, with the open-source community supplying innovation that commercial software companies can later turn into marketable products. “We will vigorously compete with products that compete with us,” says Matusow. “But it would be an absolutely unfair statement to say that we’d like to see [open source] go away.”

Open-Source Détente?

Matusow’s conciliatory message is lost on Raymond, who says that he’s convinced the software giant’s real agenda is to crush Linux. But while his anti-Microsoft belligerence is widely shared in the open-source community, others in the movement foresee an eventual accommodation between the two sides, especially as Linux wins major customers in government, education, and developing countries. Microsoft is “too well run, too smart a company,” says Cohen of the Open Source Development Labs. “They will look at the market-share data, and at some point the needle will hit a number where they’ll say, ‘This is big enough that we are not going to fight it; we are going to participate.’ Exactly how, I think they are still trying to figure out.”

Might Microsoft produce versions of Office that run on Linux, as it did for Apple’s Macintosh OS X? Will it suddenly open-source the code for major portions of its operating system and office applications and fall back on income from its server software, its home entertainment products, its online services, and the network-based services in which it has been investing heavily? The company says it has no such plans, and outcomes like these are hard to imagine, given Microsoft’s heavy financial dependence on Windows and Office. But the company’s current course – staking much of its future on the next version of Windows, when some of the improvements being discussed are already part of free open-source programs such as Dashboard – has its own risks. “I don’t think people will wait forever for Longhorn,” says Andrew Aitken, managing partner at the Olliance Group, an open-source consulting firm in Palo Alto, CA.

Especially not when they can get adequate power from inexpensive, non-Windows machines like my Wal-Mart box. The reality is that there is finally a viable alternative to Windows and Office, and that’s guaranteed to reshape the landscape of personal computing. The only questions, at this point, are how far and how fast the open-source desktop will spread – and how much Microsoft will have to change to keep up.

Wade Roush is a TR senior editor based in San Francisco.