2008: Linux's year on the desktop

Desktop Linux hurts Microsoft Linux has kept a big chunk of the server business out of Microsoft's hands. But in 2008, Linux will hurt Microsoft on the desktop. Here's how.

A new computing platform Thanks to Moore's Law and evolving application needs, a new computing platform arrives every 10 years. Mainframes in the '50s, minicomputers in the '60s, PCs in the '70s, microcontrollers in the '80s, PDAs and cell phones in the '90s and now sub-$400 - soon to be sub-$300 notebooks.

Small and light enough to be carried everywhere, these sub-notes provide Internet access, PDA functionality and basic mail and document creation functionality at a rock-bottom price. Asustek is expected to build 1,000,000 Eee sub-notes in Q1 '08 alone. Asustek's competitors are just getting warmed up.

What can Microsoft do? Microsoft has gotten fat on the $50 Windows tax it charges PC manufacturers. But on a razor-thin margin vendors can't afford Windows.

So they're going with Linux. If Asustek sells 5 million Eee's, and their competitors sell another 5 million, several million consumers will be introduced to desktop Linux for the first time.

And millions of copies of Windows and Office won't be sold.

Microsoft will skate in '08 For all the attention Apple gets for its growing market share, the Linux-based sub-$400 notebook/sub-$200 desktop unit sales will be several times as large in 2008. Even combined this won't hurt Microsoft in 2008, thanks to the growing migration to Vista.

2009 is a different story. 25 million Linux desktops will take a bite out of Microsoft sales - one that Wall Street will certainly notice.

The Storage Bits take Microsoft's days as a de facto monopoly are coming to an end - and not a moment too soon. Increasingly desperate attacks on Linux will intensify, but how does Microsoft go after Wal-Mart?

Comments welcome, of course. How should Microsoft respond to very-low-cost Linux systems?