The Register has an article on a recent report that indicates that recent netbooks ship with a Microsoft Windows OS rather than a Linux one.

Microsoft may be on its way to vanquishing Linux in the war to dominate netbook operating systems, but the ground could be shifting against Windows.

An NPD Retail Tracking Service report states the Windows installation rate on netbooks has grown from 10 per cent in the first half of 2008 to 96 per cent in February 2009.

Unsurprisingly the Register reports that various Microsoft PR folk are making a lot of noise about this but there are some definite hints that this celebration may be ever so slightly premature. The Register points out that Netbooks tend to run Windows XP as opposed to Vista. It is not clear to anyone whether these Netbooks will be able to handle a build of Windows 7 and Windows XP is anticipated to be retired in the near future.

Secondly there is the problem of the major mobile networks. These operators have seen how the iPhone (not a running a Microsoft OS) has driven data traffic growth, and how popular 3G dataplans are for netbook users. They are looking at producing branded netbooks sold with a multiyear contract at a subsidized price. These may well not run windows for a couple of reasons. Firstly the operators hate ceding control and may well find more lock in opportunities with a linux based OS (e.g. Google’s Android) and secondly there is the cost. Linux allows them a $50-$100 saving which leads to either higher margins or lower monthly pricing on their netbook+contract prices.

That is not the only issue. There is also the question of netbooks that boot Linux AND Windows. We saw an LG version of this as MWC in Barcelona and Asustek has also announced products that do this. To be sure the Linux version booted is limited in functionality but it takes 5-10 seconds to start up whereas Windows takes a couple of miniutes or more. For travellers on the move it makes sense to boot to Linux for simple tasks during short periods of time between needing to stop work.

This dual boot feature may end up being a Linux trojan horse because after a while users may start wondering what exactly is the benefit of the Microsoft OS and applications.

The problem with Web 2.0 and “cloud computing” has always been that sometimes you just don’t have internet connectivity. Hitherto most previous attempts at server-centric computing have failed. Enough critical users are on the road enough of the time that server only solutions have failed - remember Oracle’s doomed efforts or a decade ago? The same potential problem has hit web 2.0 applications as well. Salesforce.com has a dedicated offline mode and synchronization method for example and many other web 2.0 applications simply don’t work offline. This obviously limits their use in an increasingly mobile world.

However now the price of serious amounts of memory and storage (flash drives at a few Euros/dollars/swiss francs/pounds per gigabyte and gigabytes of DRAM similarly priced) means that we ought to be able to cache “most recently used” stuff locally and rely on the cloud as a repository of the rest. Until recently all this was irrelevant because the only platform we could use was the laptop with its large hard disk, Windows OS, Microsoft Office suite and comparatively limited battery life. Given the full service Windows OS and Office suite there really wasn’t much incentive in Web 2.0 / cloud versions of basic office productivity software.

Now, however, we have the netbook. Netbooks are frequently linux based and hence don’t have Microsoft Outlook/ Word etc. They also have less memory/storage compared to today’s laptops (perhaps about the same as was common 3-5 years ago) and most important of all they cost a LOT less. They also weigh a lot less and are thus ideal for business trips. Their real drawback though is that they are underpowered and so when back in the office the user wants his real computer - and thus faces the “Sync” challenge.

This combination means that ideal solution is some kind of cloud computing with offline storage. And Google is now able to offer this for Gmail accounts. Not only that but it offers “flaky” mode support for travellers with intermittent internet access. As someone who was recently in that situation I can say that this looks like a real winner.

It may also be the bullet that kills Microsoft. But that is the subject of a separate post

Up until about a year ago the received wisdom of the last couple of decades indicated that the twin powerhouses of personal computing - Microsoft and Intel - would be able to keep pushing the hardware performance/software complexity equation up and up. This factor would keep them and everyone else in their value chains happy because we’d all have to keep on buying new computers to support the new software etc. Witness MS Vista which requires multiple gigabytes of memory and multiple CPU cores to run well.

But about a year ago it all started to go wrong. The first thing was the mis-selling of “Vista Compatible” hardware which many people bought and then discovered could only run Vista extremely slowly.  Of course if you added the RAM then things got better but that required people paying more for their hardware and so they often looked for alternatives. One alternative was to continue to run Windows XP and that put a distinct crimp in Microsoft’s plans. But that may have been the least painful option.

The more painful one was for people to switch to Linux. I’ve been running a flavor of Ubuntu linux for close to a year now on machines that I use heavily. It performs well and I can do almost everything I need to do without any trouble. For the few things that really require a Microsoft OS there is VMWare player running a virtual XP machine. This actually has significant benefits because it means I’ll never need to fiddle with reinstallation hassles, “Windows Genuine Advantage” or similar ever again even when I upgrade from one PC to another.

All of this hurts Microsoft but may not necessarily hurt Intel. After all even with linux there are applications (e.g. photo editing) and scenarios (virtual machines) where a lot of CPU horsepower still makes sense.

Which leads us on to the Netbook. The Netbook niche - popularized by the Asus eee - runs linux on low spec hardware and makes no attempt to support applications and scenarios where massive CPU resources are required. The netbook products have certainly helped spread linux - and also helped keep Windows XP alive - but they may now also be beginning to hurt hardware too. Intel’s Atom chipsets which are used in newer Netbooks have been phenomenally successful but they could be hurting Intel’s sales of higher powered higher margin CPUs in the process.

Even worse for both Intel and Microsoft is that a machine with an ARM CPU core and Linux/Unix OS could turn out to be even more popular in these economically straitened times. This isn’t far-fetched, as the iPhone is precisely that and is entirely powerful enough to display video, surf the web etc. as are te Nokia N series tablets (both are considerably more powerful and capable than Wintel PCs from 10 years ago but run on a fraction of the power)

The threat here is that just as the Wintel duo kicked minicomputers and unix workstations into an ever shrnking upper niche so now they could see the same thing happen to them thanks to a combination of Linux and ARM.

The Register has an article today about Trolltech, a Norwegian company that develops software for linux-based smart phones called QTopia.

Trolltech was a notable presence at 3GSM this year in Barcelona and it was not the only Linux phone company at 3GSM - Openplug was there and I think there was at least one more. However Trolltech was clearly the market winner being able to demonstrate relationships with Motorola and so on. Now it is also partnering with the Chinese companies ZTE and Datung.

Trolltech’s clear differentiator with respect to Linux is its ability to offer a non-GPL license for Qtopia - something that is very important given that the viral nature of the GPL could potentially require manufacturers to open up otherwise proprietary application software. However what is more interesting is its differentiator compared to Symbian and Microsoft. As the founders explain to the Register:

“Microsoft and Symbian are established in smartphones, they have good support for business applications. It’s the feature phones and low-end that we believe will be a success for Linux,” says Eng.

“We think Linux will dominate the market segment where the bill of materials (BoM) is around 60 to 70 dollars and down. That’s not the smartphone segment but it’s a mass market, around one billion devices shipped each year,” explains Nord.

This is practically a textbook “discontinuous innovation” and, if it works, is going to severely limit the downward expansion of the two. Certainly I believe this will work with Microsoft as its smartphone OS is, allegedly, both rather pricy and resource intensive and hence unsuitable for the cheaper end of the market which will always be price and resource constrained. I am less clear about Symbian which has a number of offerings. The Model 60 platform from Nokia and the Sony Ericsson equivalent are, I believe, resource hungry but Symbian does have lower featured platforms and, asssuming the price is right, these could still be competitive.