A sea change is welling at the source, and Microsoft is not in a good place to weather it well. Now, before you start tossing rocks in my general direction, I’m not going to suggest that Microsoft is going away anytime soon. After all, anywhere from 96-84% of all PCs in the world (depending on who you speak to for statistics) is running anywhere from Windows 95 to Windows Vista. Part of the problem, however, is that most of them are running Windows XP and Microsoft doesn’t want that. No, indeed. Its no surprise that Vista isn’t doing well, mostly because it sucks and people know it… okay, so Microsoft itself doesn’t seem to get it yet.

Where, then, does Linux come into the picture? Do you see all of these tiny little lappies hitting the market? OLPC started it with their little green bug and kicked it into gear when they started offering the Buy-Two-Get-One deal where one goes to a child in a 3rd world country and you get the other one. ASUS saw something in that and ponied up the Eee PC, a tiny little lappy with a 4GB solid state hard drive and an eensy weensy price tag. Buyers freaked and they flew off the shelves, and other fabbers took notice and made their own. They are called MIDs (Mobile Internet Devices) and are meant to be companions to your online life.

I would say that this is simply bad timing for Microsoft, but its also bad marketing. Microsoft, as usual, isn’t giving users what they want, the Redmond giant is demanding that the users do what Microsoft wants. It has numerous ways to leverage this desire, but its primary tool is its resellers like Dell, HP, Acer, and hundreds of others. Microsoft says jump, and they all ask how high, or at least they used to. At no time in Microsoft’s long history has it had to deal with a wide-open market, a bum new OS, a re-upstart in the form of Apple, the assumed arrival of Linux for end-users in Ubuntu, and a realization in end users that they don’t have to buy Microsoft to be “in the loop”.

Of course, that’s not all. The economy isn’t helping, either. People are either buying ultra cheap and sticking with Windows XP or they’re spending more on Apple, knowing that Mac OS X systems last longer and have a better resale value. Only those who honestly don’t know any better are moving to Vista, thinking that anything coming from Microsoft must be better than the previous version. However, more and more seniors are being dragged into the market by their tech-savvy children and getting into Ubuntu is very, very easy for first time users. The people behind Ubuntu have even created a new MID-specific version which has a new UI for smaller screens. There are plenty of other small screen UIs for MIDs, as well.

What’s Microsoft’s response to this major threat? To still cancel Windows XP Professional and continue to offer Windows XP Home Edition for MIDs, and it far from clear how long they’ll even do that. MIDs, by definition, are small, ultra low power devices which are not meant to be full portable systems or to replace desktop systems, so how does Microsoft expect MIDs to effectively run Vista, one of the single most resource intensive operating systems of all time. I mean, really. Considering what you can do with Vista that you can’t do with XP and what Vista sucks up just isn’t warranted. In the meantime, Linux runs faster on slower hardware, taking the utmost advantage of whatever resources it has access to.

What can’t Microsoft do, then, when faced with this threat. It can buy Yahoo!… oh, wait. That deal’s all finished, and Yahoo! is supposedly talking to Google about a team up. Hmm. I’d suggest that MS come out and say they made a mistake then take back their cancellation of XP and announce a new version of XP based on the Pro edition. Oh, and sell it retail for US$49. You’ll make bank, dawg! Everyone will get the OS they want, and even pay for it, since US$49 ain’t a high price to pay for a commercial OS. Hell, Apple users pay US$129 for each major upgrade, and happily!

I’m not sure what’s going to happen. Really. I’m just a pundit so I’m not qualified to read the future. What I can tell you, though, is that if Microsoft continues on the path it is traveling, Apple and Linux-based systems are going to start to gain some major marketshare. No, Apple isn’t going to dominate the market next year or even by 2012. Apple will have a very large marketshare, then, though. Keep that in mind. Keep watching the iPhone and the iPods which are now as necessary as underwear. Just keep watching.

written by Tyler Regas