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Eric Raymond: Microsoft doomed by cheap PCs

Microsoft's software monopoly can't survive economically once PC prices drop below a certain level, predicts open-source guru Eric Raymond

Microsoft's software monopoly is running out of time, says open-source guru Eric Raymond, and he's got a precise figure for when the company's position will no longer be sustainable: $350 (about £245).

"When the price of a PC falls below $350, Microsoft will no longer be viable," Raymond said in an interview with ZDNet UK. "The reason is that if you sell something below that price, you can't afford to pay the Microsoft tax and still make money." He said the best illustration of this is the handheld PC market, where Microsoft software powers relatively expensive devices, but has no presence in the lower-end market.

Prices are falling in the PC market too, however, and it isn't difficult to imagine buying a computer for about the same price as a DVD player before long, he said. Ultimately, the commoditisation of PCs, and the shift to the Internet, will make Microsoft's relatively expensive software obsolete, Raymond argues.

"The only way to explain Microsoft's decisions over the past couple of years is to say that they know their packaged software business is doomed," he said.

Raymond is best known as a theorist of sorts for the open-source software movement. His book The Cathedral and the Bazaar argues that the open-source model of large-scale collaboration ultimately works better than the centralised proprietary-software method, particularly as software grows more complex. The book chronicles Raymond's involvement with the creation of Fetchmail, the widely used open-source email management utility.

Open-source software gives developers free access to its source code, or original programming instructions, while proprietary software companies closely guard their source code.

Raymond and many other open-source backers, including major corporations such as Hewlett-Packard and IBM, believe that open-source software like the GNU/Linux operating system will ultimately challenge Microsoft's Windows monopoly.

The model of having a large, decentralised development community checking software for bugs inherently makes more sense than the proprietary development model, because the number of bugs grows in geometric proportion to the complexity of the software, Raymond believes. Even vast companies like Microsoft have to struggle to keep their software relatively bug-free, while open-source development communities can grow to be as large as they need to be to keep the software safe.

Open source works because "all the other methods of verification have run out of steam -- we don't know anything that works so well," he said. "On a basic level, people are making the rediscovery that centralisation doesn't work when you get to a certain level of complexity with any human endeavour."

Software like Linux also inherently has more appeal to many non-English speaking countries than software generated and controlled by big American firms, Raymond pointed out, which is becoming a significant issue as PC growth outside the US becomes the industry's main driver.

"Countries like South Korea are finding that open source is a precondition to their economic and cultural autonomy," he said.

Raymond is stopping off in the UK this week as part of a speaking tour of Europe.


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