From this week's Tech Watch

Life without Microsoft

By Jon Peddie

Microsoft is the company everyone seems to love to hate. It's partially due to their size, and aggressiveness, and the monopolistic control they have on the industry. And as you've heard me and others say, Microsoft has stabilized the industry by imposing their standards on it. I think it's fair to say the PC industry would not have grown to the size it did in the time it did without Microsoft's influence.

In the earlier days when a startup was introducing a product, the founders would get really excited if Microsoft showed some interest. In those days the Godfather Microsoft's blessing would put you in a "made man" status. Today if a startup finds out Microsoft is interested in it, the startup lives in fear and tries to protect itself in anticipation of Microsoft inventing their product and putting them out of business. It's happened many times, with perhaps the most famous examples being Netscape and Wordperfect.

As Microsoft got bigger, standing up to the company in the marketplace got harder, some say impossible. Microsoft could, and would, bundle a product like a competitor's and offer it for free. Hard to compete with free.

So the companies that are competing with Microsoft are using that tactic—free. And the result is annoying to Microsoft, who wants to have 100% market share, but not devastating, although possibly worrying. And of course the Greek chorus of analysts and columnists love to write and report on it.

Linux is probably the best-known example, and according to a recent report by IDC, Linux servers grew at 42% to $1 billion as compared to Windows server products' growth of 13% to $3.9 billion. The data is misleading in terms of units because the ASPs are so dramatically different, and even so 25% market share gain with 42% growth is pretty impressive. Linux is gaining in the workstation market as well, and a few geeks are using it on their desktops, but it hasn't hit mainstream—yet.

An ironic development is the encroachment of Mozilla's new Firefox browser into Microsoft's Internet Explorer market. A Dutch web analytics provider released statistics this month showing that market share for IE fell below 90% for the first time in several years as Mozilla browsers surged to 7.35%. This time it's not just the geeks and the power users; mainstream users are picking it up. Firefox offers many advantages over IE, including speed and a built-in popup blocker. Mozilla also claims they are less virus vulnerable than IE—and Netscape hasn't gone away either; it's also free.

The other threat to Microsoft's monopoly is OpenOffice, which runs on Solaris, Linux (including PPC Linux), and Windows. StarDivision, the original author of the StarOffice suite of software, was founded in Germany in the mid-1980s. In 1999 Sun acquired it and StarOffice was released in June of 2000, then Sun gave it to Open-Office.org, who is now offering version 1.1.3 and is about to release version 2.0. Two-oh will be a scary thing for Microsoft because it threatens one of Microsoft's main cash cows, Office, and it comes with a lot less problems and more unified UI than does Office. It's already being picked up in developing countries, and in so doing could block Microsoft's entrance into those future markets.

Other programs, some not free, but competing with Microsoft, are email programs. Eudora is probably the best-known email program, and version 6.2 is now shipping. It offers built-in spam blocker, and there is a free version. Goldmine and ACT are others that compete with Microsoft and seem to do so successfully, but haven't made it to the mainstream yet. Nonetheless, these email systems don't have the security holes in them that Microsoft is constantly patching in Outlook.

In the API area, OpenGL has maintained its strong hold in professional graphics and in the game world against DirectX. APIs are esoteric little things and not something mainstream users are aware of or very interested in, even though they use them every day.

So when you add it all up, you could operate today, just as you have, and without Microsoft. You could get Linux as an OS, OpenOffice for your word processor, spreadsheet, and presentation programs, and they'd be completely compatible with Microsoft's Office products, although some things might not work like some of new animations in Microsoft's Power-Point. You could use the Firefox browser, and Eudora's email program.

We've tried all these things and found them to work. We're using some of them as part of our standard setup, and so far we're getting along just fine with the Microsoft world. But we're geeks and experiment for a living, not what you'd consider mainstream.

The $100 PC

There's been a lot of discussion about the $100 PC. The component costs are rapidly approaching a BOM that would fit the bill, but it can't be done with an OS that costs $40 or more, obviously. However, for the really mass mar-kets—China, India, Africa, Eastern Europe and Russia, and South America—where PC penetration is less than 30%, only a low-cost PC will be successful. And that's the hope and promise for the open source suppliers like Mozilla, Linux, OpenOffice, and others. It's hard to compete with free—Microsoft taught the world that, and now it's faced with having to deal with it in the emerging markets. And whereas those emerging markets were happily ignored because there wasn't any money there, with globalization and outsourcing those emerg-ing nations are rapidly increasing their GNP and individual income. So while they might buy a $100 PC today, as their economies improve and their spending power increases they will buy up. But as Microsoft knows very well, brand loyalty is a strong influence, and if Microsoft is cut out of those markets then its market is capped, and a capped market can only decline as competitors pick away at it. Hard to compete with free.