Unsurprisingly netbooks are hurting Microsoft.
Allegedly Windows 7 will run pretty well on netbooks. I'm totally ignorant of the details here, but this surprises me. I always assumed that at least some of the reason that Vista appeared so clunky was that more of Windows had moved to Managed Code in a sandboxed virtual machine. Does the performance improvement mean that Windows 7 moves some things out of that? Or have they found a way to make it more efficient?
Whatever the facts of that, it's clear that M$ are cutting the price to compete with free Linux on netbooks. And that's a loss that isn't going to be recovered if (as I predict) the O/S for netbooks remains a commodity. (As in, they won't be able to make Windows an essential as opposed to more-familiar-and-therefore-preferred option.)
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I'm using an old computer and dread when it will inevitably break down; probably sooner than later. Something cheap to replace it is realistically all I'll be able to do. So a Linux box looks appealing, the offerings loaded with Zonbu for instance.
I wonder if you saw One Laptop Per Hacker OLPH?
It's really hard to tell, but I think it's not just netbooks which will drive MS competition for OS, but educational users too. I can't afford MS software and find that Open Office and The GIMP are great software. As Linux distributions improve--and I think that the educational market is important here--more business environments will switch to them.
MS may not want to sell XP, but won't it make sense for them to continue to do so?
The security issues are a real stumbling block for MS. The business plan of Gdium seems so smart to go after educational users. It looks to me that schools could have more secure computing much cheaper and businesses too. It seems to me that MS ought to maintain some version of XP for schools and other OS commodity customers.
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