Heh. CP/M RuleZ!

No, I’m not loosing my mind – not yet anyway. But there’s an article over at Dailymotion on Snow Leopard and some of the comments caught my eye – this is the result.


Heh. CP/M RuleZ!

Yep, I’m that old. Age aside, GNU/Linux is having a huge effect on Apple and Microsoft. Currently most of the real “innovation” is occurring in Free Software projects, such as the Linux Kernel, the KDE and Enlightenment desktop environments, etc. Currently GNU/Linux is technically miles ahead of Microsoft, and somewhat ahead of Apple. Microsoft has no advantages over GNU/Linux, Apple’s only advantage is the matchless integration of OSX with Apple hardware.

Right now Microsoft is in deep trouble. Their product is not very attractive compared to the product that their main competitor (Apple) produces. Their product isn’t as inexpensive as their other competitor (GNU/Linux). Their product technically is inferior to both.

The only thing allowing Microsoft to continue making sales is their contracts with the computer OEMs. And Windows isn’t all that profitable for Microsoft, their major profit center is the business division, which includes Office. Microsoft used to make lots of Office sales to Apple users, but since Apple started selling IWork, and since Apple has added Exchange support directly to the OS, Apple users don’t need Office anymore. A long time ago Microsoft back stabbed Apple. Apple remembered, and has now back stabbed Microsoft. Did you know that Microsoft pays Apple to include a copy of Office on every Mac sold? Microsoft has made a lot of money from that over the years, but now people are buying IWork instead, and Microsoft looses out.

Apple has taken over the high end (one report I saw indicated that Apple supplied 90% of computers that sold for more than $1000.00 US), and is moving down market. This puts a lot of pressure on Microsoft. Meantime, Dell and several other manufacturers are offering GNU/Linux systems. Since there isn’t a Microsoft Office for GNU/Linux, every one of these systems sold hurts Microsoft badly. That’s why Microsoft made XP available to Netbook vendors, and why it strong armed them into selling XP only Netbooks when it could. And it was successful to a certain extent, but it took a huge hit on margins doing it.

Steve Ballmer has stated that cutting margins to increase sales was a mistake, and that they don’t intend to do this with Windows Vista 7. Now I don’t know what the price was that they charged the vendors for XP. Rumors have had it anywhere from $5.00 to $35.00 US, and any (or all) of that range could be correct. But GNU/Linux costs nothing. So what Steve means is that in the greatest recession since 1929, he’s going to hit the hardware vendors with a price increase that they won’t be able to absorb. They’ll have to pass it in. Anyone selling GNU/Linux systems will be at a huge advantage. They can include better hardware (larger hard drive, more ram) and match prices, or they can include the same hardware, and undercut the competition. Dell, who’s flirtation with Ubuntu goes back over 5 years, is the large OEM which is in the best shape to take advantage of this.

Microsoft’s recent 10K filing with the Securities and Exchange Commission showed the company’s weaknesses. It’s a long document, and it’s accounting-speak, so it’s rather boring, but when you put the numbers together, it’s rather obvious, that Microsoft is a company that’s in trouble. No, I don’t mean that they will crash and burn this week, but quite frankly I’d be surprised if the company lasts more than 5 years. Remember – most of their profits come from Office. Apple has just fixed it so that Microsoft’s Office market share in the Mac market is going to shrink drastically. Dell and the other OEMS who ship Linux systems are making the “PC” market for Office shrink even further. And Office is the only product that Microsoft makes a lot of money on. They don’t make any money on the X-Box 360 – warranty claims have left that product line in the red. They don’t make any money on the Zune. They are cutting products (Microsoft Money anyone?) weekly. This is a company in deep trouble, and any ISV which doesn’t have a Microsoft exit strategy in place is suicidal.


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