Forgive The VAR Guy for saying it: But he told you so. A few months ago our resident blogger predicted Netbooks — the name for an emerging market of sub-notebooks — would increasingly shift to open source and put the squeeze on Microsoft. Fast forward to the present, and Microsoft is already feeling the heat from Netbooks. Here’s the scoop.
According to Barron’s, Microsoft’s most recent quarterly results revealed weaker-than-expected client momentum because more and more PC market growth involves Netbooks.
Now, for the twist: It’s no secret that multiple Linux distributions — particularly Canonical’s Ubuntu and Novell’s SUSE Linux, among others — have gained major momentum on Netbooks. In response, Microsoft has had to cut its Windows OEM prices to make sure Windows is a major force in the Netbook market.
The VAR Guy predicted in July that Netbooks running Linux would proliferate the market. It’s already happening.
How much does Microsoft charge Netbook makers for Windows? Alas, The VAR Guy must concede that he doesn’t know for sure. But clearly, given Microsoft’s latest financial statements, the move to new hardware form factors coupled with open source is causing the software giant some pain.
But don’t weep too long for Microsoft. In its financial results, Microsoft said it had more than $20 billion in cash and expects to generate at least $2 per share in profits for its current fiscal year.
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“Microsoft said it had more than $20 billion in cash”
The sky is falling.
Only a few years ago Microsoft had more cash than Australia’s GDP.
It was about $200 billion.
Where has it all gone.
Maybe some creative accounting to prop up profits.
That’s what IBM did before it went the inevitable way of all monopolies and shrunk back to a bit player.
another big factor has nothing to do with price, but speed. vista simply has nothing on linux in that department.
My prediction: Microsoft will, at some point, release a “free as in beer” edition of windows for home users (but not free as in speech). It will hurt their bottom line somewhat, but will ensure their market dominance for another generation of users.
With soon to be falling netbook prices I don’t see how Microsoft can compete. Windows 7 ain’t gonna be free.
News flash. Not many people pay for the Windows operating system directly. And smarter people don’t pay for it at all when system upgrading.
People are voting for Linux or MAC systems with their own cash. Things will not change even if Microsoft gave away any of their software. The customer wants to move on to bigger and better things.
@Stomfi: I think you’ll find Australia’s GDP is more than 4 times the amount you quoted.
>How much does Microsoft charge Netbook makers for Windows?
As little as $18.
http://en.wikipedia.org/wiki/Predatory_pricing
Update: Linux Netbooks are super-hot sellers in Australia. New details from The VAR Guy are posted here.
You forgot the efffect of the “I hate Microsoft” factor. I can’t stand those jerks and do everything I can to avoid their products. I install Linux for everyone I know and show them the light. I help them with their problems and if they have windows, “I don’t do Windows, get Linux” is my answer.
@JMan: +1. The same here.
I bought for the sake of curiosity a Bill G. biography (not a biased one, it simply came with a local newspaper), and now I’m caught in the “I hate M$” effect. I found myself saying “sorry, I don’t support microsoft products anymore” to friends asking for help. An interesting reading, though. An editorial fund to publish many copies of that would be a good investment for micosoft’s competitors