Are multiple global forces conspiring to knock Microsoft's other foot off the cliff's edge?

Perhaps the feeling isn't as palpable for you as it is for me. But, when I watch all the forces in the global market that are inadvertently conspiring with each other to dethrone Microsoft, I feel like I'm watching a real-life cliffhanger.

Perhaps the feeling isn't as palpable for you as it is for me. But, when I watch all the forces in the global market that are inadvertently conspiring with each other to dethrone Microsoft, I feel like I'm watching a real-life cliffhanger. It may not play out in the time it takes a blockbuster movie to finish. But I see a strong-handed company with a firm grip on the cliff's edge with mounting problems, particularly a new one, that have me wondering if it can engineer an adjustment on the order of what it did in the 90's when the Internet momentarily caught the software giant with its pants down.

In no particular order, three major issues (metaphorically speaking) face the company. Microsoft's gear (caribiners, ropes, etc.) is showing signs of age, but still fits like an old glove that its loathe to get rid off. Second, the company may still have a firm grip, but it's also got some additional weight around the midsection that will make it harder to keep that grip for extended periods of time (the way it is accustomed to doing). It's hard to fight gravity. Finally, whereas the company really never had anybody stomping on its fingers (and when there was, they were wearing sandals), suddenly the queue is filling up. Only now, the finger-stompers are wearing workboots with Vibram soles. Ouch.

Who's in line? Unlike the days of yore, you can't spit without hitting one of them. There are the obvious ones like Google (with Google Apps aimed directly at MS-Office even though the do-no-evil people say it's not) and Yahoo! (the Zimbra acquisition puts Yahoo! in direct competition with Microsoft Exchange). Then there are the major proponents of the Open Document Format (ODF) like IBM and Sun which have, for the time being, done what Microsoft has been unable to do with it's own file format: turn it into an internationally accepted standard.

And who can deny the profound effect that Linux has had on Microsoft's server business or the stunning antitrust defeat that was handed to Microsoft by the European Commission.

Then, there are the more subtle forces. For example, the One Laptop Per Child project which looks like it will exit the starting gates this year is undeniably one of Microsoft's stealthiest threats. In anticipation of its official release, the buzz around OLPC is building - the latest news being that for a total of $400, you can put an OLPC in the hands of some kid in a far off developing nation at the same time you get one for yourself.

Why would you want to do this?

In addition to taking your turn at doing something nice for the world, as it turns out, the OLPC represents several cool innovations in mobility that are long overdue from the notebook manufacturers we know and love. Imagine for example, a $188 notebook PC with a liquid proof keyboard? (I'm barely scratching the surface of the OLPC's innovations). No, the OLPC isn't going to replace that road warrior Thinkpad of yours anytime soon. But it appears poised to put its own blend of Linux -- known as Sugar OS -- into the hands of millions of future adults. The spin doctors can work this development to Microsoft's favor that all they want, but the bottom line is that the OLPC is not a positive global development for Microsoft.

This week, the normally anti-regulation Globalisation Institute recommended to the European Commission that it force Windows to be unbundled from PCs, thereby giving European buyers more choice.

Back to IBM, it was one thing when Sun was instrumental in the release of a free competitor to Microsoft Office in the marketplace. But when IBM did the same thing (based on the same technology), heads really turned.

Like a wagon train headed for the Wild West besieged by Indian attack, there isn't a direction Microsoft can look without seeing a threat. Not to mention how the excitement around Microsoft and its products has sort of worn off. That's not to say that its products are no longer compelling. In many cases , they are (and are in fact getting better over time). Although it took me a while to get my wife's Vista-based PC dialed-in to the point that she could actually use it, not only is she quite happy with it --- I'm very comfortable given the extra lengths to which it goes to secure her online computing experience. But even as its technologies improve over time, its journey to one corner of the universe (where computing is mostly about running Microsoft shrink-wrapped software on Microsoft operating systems, accessing Microsoft formats) while so many others are headed in completely the opposite direction has produced divisions in the industry that have ultimately made Microsoft less exciting to watch. In other words its no longer the buzz machine that it once was.

But it's the latest news that I picked up in my RSS feed that should be setting off some alarms on the Redmond Campus. Digg's summary couldn't have been more appropro:

HP isn't going to sit by and watch Dell ride the Linux train into Buzzville.

Buzz is definitely a factor and the news to which Digg was pointing was the Ars Techica headline:

HP to expand Linux PC offerings to other countries; US a "real possibility"

Ryan Paul, the story's author writes:

Late last month, hardware vendor HP announced plans to offer desktop computers in Australia with Red Hat Linux, OpenOffice.org, and Firefox installed. Now the company has confirmed that it is expanding this program to other parts of the world. Moreover, sources close to the company tell Ars Technica that expanded Linux offerings will also be coming to the US. Our source says that it is a "real possibility" that HP will counter Dell's limited embrace of Linux "sooner rather than later," so long as pilot programs proceed as planned.

Among the many forces conspiring against Microsoft, there are clearly two that produced this opportunity. It has clearly taken some time, but the first of these is the domestic antitrust action that was taken against Microsoft earlier this decade. Whereas the the 90's was a period of time that PC manufacturers lived in fear of Microsoft, this post-antitrust era of the 2000's (from a PC maker's point of view) is about freedom from Microsoft.

Whether Microsoft was guilty or innocent of unfairly exercising monopoly power isn't the point (I covered the case extensively, but also know how easy it is for trustbusters to conveniently define a market in order to prove one company monopolizes it). What is the point is that, thanks to that antitrust action, PC manufacturers no longer have to care about how Microsoft will react when making decisions. That's a big difference from where the industry was only a few years ago when a PC couldn't even be shipped with out a miniature Windows Certificate of Authenticity affixed to it (check your PC, it's probably there, somewhere).

The second of these forces, at least to me, is the seemingly unstoppable buzz around Ubuntu Linux. It's not that the HP story is about HP going with Ubuntu. In fact, according Ars Technica, HP appears to have a proclivity towards Novell and Red Hat. What it is then, is that of all the desktop Linuxes to come along, Ubuntu for some reason comes across as the one that can most meet the needs of an ordinary PC user the way Windows does.

It seems like every few stories I read about Linux are in some way shape or form about how Ubuntu is so easy and getting easier that there's no reason Grandma can't be using it. Based on the buzz alone, Ubuntu Linux is clearly the distribution of Linux that rises above all other distributions as the flagbearer of Linux's hope to be as mainstream on the desktop as Windows is. That may or may not be the case. Perhaps Novell, Red Hat, Xandros or some other distribution do better. But Ubuntu is currently the one with the cred and not only does it have more that cred than the others combined -- it is single-handedly giving desktop Linux on the whole more cred than it has ever had.

Enter the PC manufacturers. Far less concerned about their relationship with Microsoft than they've ever been, all they've really needed is a distribution like Ubuntu to give desktop Linux the credibility it needs to merit a SKU in their lists of desktop offerings. They don't even have to go with Ubuntu. More than likely, over time, it will be Novell and Red Hat that end up riding the coattails of Ubuntu's early credibility to some measure of their own success in the desktop operating system business.

But now that Dell, Lenovo, and HP are all in the frame of mind to offer Linux-based SKUs, the question is whether this shift in PC manufacturer mindset could be a crucial tipping point for the Windows-Office franchise. Microsoft's long term success is in no small part attributable to the distribution it has been afforded by PC manufacturers -- a channel that it has owned to the exclusion of all other competitors. Those days now appear over. It's another Vibram sole grinding on Microsoft's fingertips. What are the others and how does this cliffhanger end? Let me me know using the comments below.

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