Microsoft began this journey ironically with the advent of Product Activation. What journey is that, you might ask? Well, I would answer, the journey to extinction on the home desktop. And you might respond with, Apple's market share hasn't grown that much to worry the Software giant. To which I'd respond it's not Apple they should be worried about, it's Linux. When MS implemented Activation on the XP Desktop they unwittingly started the ball rolling on change. Not a change in revenue like they expected but a change in the OS of the Desktop PC market. Through their essential monopoly and strong arm tactics of the PC resellers they've managed to hang on to their market share for now, but in trying to squeeze every cent they can out of the consumer they have unwittingly opened the door to Linux which is, Free. The lack of cost involved with Linux is the key factor here.
Over the past few years a very smart group of people have worked diligently on improving the ease of use of the product. My introduction to Linux began with Fedora 5, and let me tell you things have come a long way. With the latest release of Ubuntu 10.04, Linux has reached a level on the home desktop that it can compete and win against both Microsoft and Apple. If you haven't tried it yet I highly recommend giving it a go. A real problem for Microsoft is that Apple really isn't threatened by Linux. Apple Fanbois are brainwashed into believing that no price is too great for technology that in some respects isn't up to the levels found in the PC world from either Microsoft or Linux. That market segment will never change and will eternally remain a source of revenue for Apple. The rest of the home computer world is a little more fiscally concerned and they buy Microsoft. Now if the Linux community can offer a competitive product to Microsoft and it has No Cost, well the math is simple. Linux will devour Microsoft's market share once people realize what is going on.
Microsoft compounded their own situation by creating the Xbox. With the Xbox there is no longer a need to use your PC as a gaming device. If you don't need Microsoft Windows for gaming and you don't need Windows to surf the web, get email and use an Office productivity suite, then what do you need Windows for? Linux surfs the web, gets email and has an excellent full Office productivity suite that is free. When you add up the cost for the privilege of running Windows on your PC then suddenly there is no Value to it. Linux, Ubuntu in particular should be gobbling up that Microsoft market share as we speak, but alas it is not. Linux has problems of it's own. Not technical problems but organizational problems. Since there is no central structure behind Linux and there is not a gigantic revenue stream generated by a free product, it becomes a very difficult task to get the word out that it even exists. Against the combined Marketing juggernauts of Microsoft and Apple the voice of Linux gets drowned out. However given enough time, the little mouse that is Linux will roar.
Like a snowball rolling downhill, it has started small but made huge gains particularly in the last couple of years. Given where Linux has come from without any real financial backing, and where it is today, in another 5 years Microsoft may have to ask itself, Do we Open source the Windows home desktop or abandon the home market all together? It is an interesting dilemma that they have brought on themselves. What do you think?