I'm not so sure on the first, and I know the second is plainly false. For the average consumer, the switching cost associated with moving from Windows to Linux is quite hefty relative to buying a new copy of Windows 7...
I guess Microsoft probably sells more licenses to BigCo than to natural persons these days, and for them the switching cost probably is non-negligible, owing largely to investments in custom Windows software. Maybe when you say "consumers" you have in mind a random sample from all Windows customers.
As for "consumers" in the vernacular sense of natural persons, I think the cost of switching from Windows to MacOS X or GNU/Linux is not more than the cost of moving from Windows to Windows. The main thing I've seen is that they have to copy their data from one machine to the other, and/or decide what to throw away. The second major cost is relicensing their old apps, which they do anyway because they might as well upgrade.
Yeah, and he turned out to be right. Now, only 6 years later, nobody uses Windows and everyone uses Linux.
I love how he uses a prophecy that has totally failed to occur at all as the starting point for rehashing the same prophecy.
As far as Linux on the desktop goes, it's too early to call failure. Six years is not exactly an eternity. But in that six years, Linux has become much more user-friendly and easy to install, major vendors like Dell have started selling it pre-installed, MSIE has lost its dominance (which is important because you can now use the internet without running into MSIE-only sites now), webapps have made the OS less important, and the netbook thing is happening, reducing prices to formerly unheard of levels, making the price differential between Windows and Linux that much more important.
Call failure when the marketshare of Linux stops growing at the expense of Windows.
Here are some stats: Linux's numbers are low, but growing.
Open source hasn't stopped Microsoft or even slightly slowed their growth. The only thing that's had any noticeable effect is the recession.
Free software and web applications look, indeed, a lot like a low-end disruptions into Microsoft's software business. Just because ESR predicts Microsoft's demise since ever, it doesn't mean it won't happen one day.
Still, I think Microsoft will become a very different company in the next five years.
I would go out and buy it immediately for my Mac's VM.
>The big issue, however, is that Netbooks are not being bought as computer replacements
PCs weren’t bought as minicomputer replacements, either. This did not prevent them from executing a classic low-end disruption on minicomputers. You should study that concept.
In fact PCs were bought as minicomputer replacements after their performance caught up, and that is the classic disruption pattern. The difficulty of netbooks penetrating the corporate environment isn't just performance, it's also a combination of the desktop form and the support that corporations want.
Soon, netbook performance will become comparable with laptops, but that alone won't make Microsoft's empire fall. In time it is likely that the same commoditization happens to the corporate market. It just won't be with netbooks, and not as fast as Eric Raymond would like.
Microsoft still relies on essentially the same business model (a software-product company.) essentially the last 30 years. It is trying to diversify, yes, but most of its money still comes from Windows and Office.
Someone said a company is truly great when it has made it to the 3rd great CEO. How many CEO who had the ability and the vision to reinvent the company has Microsoft had?
By my count they are stuck at two.
Jon Shirley, who was credited with taking a very young Microsoft and creating the proper corporate structure to stear it through its IPO and allow for its explosive growth.
and of course Bill Gates, who is one of the pioneers and visionaries of the PC age. He took the company from 800 million a year in revenues to 22 billion in revenues.
I wouldn't include Steve Balmer in the mix but that is of course up for interpretation
He basically assumes that Microsoft will do $0 in revenue soon, which is so unrealistic that it destroys the whole argument.
What's funny of course is that if you believed in his argument that a recession will hurt OS companies that charge too much for an OS, then Apple should be in even worse shape than Microsoft. Not quite.
Eric fell in the tempting fallacy of drawing two points on a chart and assuming that you can draw a line to extrapolate. Linux is free and growing, Microsoft charges money and is losing ground. Therefore eventually Microsoft will die. Now try to add Apple to that chart and see how well extrpolation works...
It doesn't necessarily have to support every variant. I just mean it would be amazing if Apple struck a deal with Dell so that OS X could run on their laptops. However, I think Apples decision to support outside hardware will likely be an image thing over a cash thing. If Apple compromises its image then it could potentially compromise their entire business.
These parts makes it sound like Microsoft is in the red when in reality they are making enormous profits, just not as much as they'd like. That 20 month figure assumes zero revenue.
Legacy customers, in particular in the corporate IT world, will ensure that Microsoft will retain its profitability long after it loses its stock value and its relevance (already it has lost a great deal of its relevance, but it still has much further to fall).
"""Windows 2000 will be either canceled or dead on arrival. Either way it will turn into a horrendous train wreck, the worst strategic disaster in Microsoft's history.""" -- http://catb.org/~esr/faqs/hacker-revenge.html
> Legacy customers will ensure that Microsoft will retain its profitability long after it loses its stock value
Absolutely. Microsoft's downfall (if it happens) will be from industry-controlling colossus to large and profitable software and services vendor.
Also just read his previous blog post about Israeli offensive in Gaza. Eric Raymond surely has some extreme views on the conflict, saying things like Islamofascists and other things. I was a fan of Eric Raymond but i surely didn't know he was a right-wing nut.
Netbooks sell well because they are cheap and small. They are useful for particular tasks in this configuration, but not for others. The market is changing, but not towards netbooks exclusively. What people want, and don't get yet, and will jump to purchase when they come are:
- Very thin notebooks that are very cheap, but have 15 or 14 inch screens
- Very thin and small notebooks than have 12 inch to 10 inch screens, and are very cheap
If any of the above is above 700mhz in speed, it's fine, as speed is not the main criteria for the bulk of people. The third category of people want
- the same as above, but with lots of ram and speed for video editing, photo editing work
All 3 classes want an automatic connection to flat screen screens at 32 - 30 inch at home, auto connection to external mouse and keyboard.
Current style notebooks as well as all categories of desktop computers are not wanted, they are just taken because they are what is available. Nobody wants a large box sitting underneath his table, it just happens to come in that form factor.
Netbooks fulfill a part of the above, and that's why they are selling. They will not stay low end forever.
Quick math: if the burn rate is $12bn/year, and there are a (handwavy) billion Windows || Office licenses bought or renewed each year, that's $12 per license to break even -- and that's excluding revenue from Sharepoint etc. Pricing on both products can fall quite a bit before they're in the red.
And it probably won't matter, if the home PC goes the way of the landline phone. I assume that's the market ESR is concerned about, anyway.
