He posits that Microsoft is facing serious competition from Linux on netbooks and other low-end computers, such that if it wishes to protect its application market (mostly Office), it had better give away the OS. Unfortunately, it’s not clear that he really understands what “open source” means, instead using it as a synonym for “free of charge.” You can download most open source software free of charge, but as the name implies, it’s about more than price. In fact, it’s really about availability of source code. It just happens that if the source code is freely available, it’s really hard to charge much for a compiled binary; as a secondary effect, the application is usually free.

Nevertheless, let’s restate the first sentence of this post as “Will Microsoft be compelled to give away Windows for free?” And the answer is that it already does. Or close to free: Large computer retailers like Dell certainly aren’t paying what you would pay for Windows when buying it in a store. In fact, according to Babcock’s article, they’re paying $34.00 a copy. And here’s a tip if you work for a large company — when the Microsoft rep comes around trying to get you to upgrade to Vista, or Windows 7 when that time comes, tell him that you’re conducting an internal study examining the feasibility of switching to Linux. Your price will come down dramatically too! Linux has mostly damaged Microsoft by serving as a handy negotiating hammer for organizations whom one suspects weren’t even seriously considering switching in the first place. People don’t have to actually adopt Linux for it to eat into Microsoft’s profits.

That it has become such a credible threat is a benchmark of how far it has evolved over the past few years. However, that may not amount to much in the marketplace as long as Microsoft is prepared to cut any deal to keep organizations from switching teams.

And speaking of those potentially Microsoft-threatening netbooks, how is the father of all netbooks, the OLPC XO, faring? I suppose the answer is in how you look at it.

From a hardware perspective, there are problems, especially if one examines the response to OLPC’s two G1G1 (give one, get one) campaigns. G1G1 was a program where if you paid for two XOs, one would be sent to you, and one to a needy child somewhere in the developing world.

In 2007, G1G1 netted $37 million. In 2008, it netted $2.5 million, necessitating the firing of 50% of the OLPC staff. What happened? OLPC founder Nicholas Negroponte blames it on the economy, but I don’t think the economy alone is sufficient cause for such a dramatic difference. Another approach to the question might be: Why was 2007 so successful? In part it may have been the birth of the netbook, the idea of a wee, inexpensive laptop which would be everything you needed for simple tasks like web surfing and email, coupled with the marketing of the XO as if it were a wee, general purpose laptop. But its success quickly turned on OLPC, as many people, upon receiving their XOs, were dismayed to discover that the devices sported a radically new operating environment, a graphical one designed from the ground up exclusively for use in the classroom, and following the pedagogical philosophy of constructionism. It was called Sugar. By the time of the 2008 G1G1 the cat was out of the bag regarding the XO.

And the final reason the 2008 G1G1 may have been such a dismal failure was the simple fact that Nicholas Negroponte is a colossal buzzkill who, by getting into bed with Microsoft, pissed off hoards of open source fans who were cheering for the project, as well as working for it. The chief software architect, Walter Bender, resigned over the matter. Personally, when the 2008 G1G1 was on I considered hyping it a bit, here and there and to friends or wherever, but it just didn’t feel worth the effort. There was a little voice in the back of my mind saying “Just die already.” It’s hard to see how the OLPC can continue with such a profound deficit of vision at the top, now that many like Bender have left.

If you were to ask how the software is doing, however, the answer would be somewhat different. When Bender left OLPC, he set up Sugar Labs to continue the OS’s development. Sugar is released under an open source license, the GPL, so there’s absolutely nothing stopping him from continuing on his own. Indeed, he has something of an advantage over OLPC in that, while no one is going to give you hardware for free, people will give of their time and talents for something they are passionate about. Sugar is alive and well and carrying on, with plans for the future. These include Sugar on a Stick, basically a bootable USB stick you can use to boot into the Sugar environment on most any old computer. Sweet.

Still no sexbots. Perhaps they’ll be one of those techs like videophones — featured in scifi, but, once the technology is actually available, not really generating the interest scifi authors anticipated. Or perhaps it’s economic. Maybe there are some amazing million dollar sexbot prototypes even now hidden away in labs in Japan or somewhere, just waiting for the cost of their components to decline, or for cheaper methods of manufacture.

This year I think I’ll play it conservatively with regard to predictions. 2009 will look pretty much like 2008. Perhaps processors will be a little faster, maybe more cores available in more affordable chips. The one striking thing, which isn’t exactly new but which we should expect to see more of, is an emphasis on energy efficiency, at both the consumer and pro levels. Energy efficiency could mean longer battery life for consumers in their various electronic gizmos, while for business it translates to lower energy costs for server rooms — less power, less heat, less air conditioning, less cost. The PR benefit to “going green” is incidental; there are real bottom line cost benefits to energy efficiency.

Some prognosticators might be tempted to declare 2009 the year of some iPhone killer, but that would be nonsense. Apple makes lovely bits of hardware that have always been able to hold their own within their sector of the market, namely design-conscious people who don’t mind being milked on price. Apple will lose a bit of market share as other players enter the touch screen phone market, but one has to remember that if the market had been established by another company’s product and then Apple came out with the iPhone, Apple fans would still have lined up to get one. Steve Jobs has a captive audience that would buy his excrement if it was nicely packaged and called iShit.

That said, Nokia is poised to challenge Apple in the touch screen phone market with its N97.

And while it’s traditional to predict that the coming year will be the year of Linux on the desktop, this year let’s be more modest and predict that 2009 will be the year of Linux on the netbook. Netbooks, if you haven’t heard, are very small and affordable laptops. Arguably the machine which lit a fire under this product category was the OLPC XO, followed by the eee pc, and others like the Asus Aspire One.

While the emergence of netbooks caught Microsoft off guard, the company is now competing aggressively and pushing Windows on netbooks any way they can. Obviously, netbooks having more limited processor power and memory, Vista is not an option, so Microsoft has extended the end of life of XP Home until June 30th, 2010.

You’d think Linux could eat Microsoft’s lunch, given that the netbook market is one of limited hardware resources and retail price. The regular cost of Windows XP is almost as much as a cheap netbook itself. But herein we see one of Linux’s weaknesses, namely the lack of a well financed, central head office that can do battle in a swift and organized way. When Microsoft’s interests are threatened, Lord Balmer sends forth the nine riders on their black horses who visit every corner of Middle Earth doing whatever it takes to keep Windows dominant, practically giving it away where necessary. If Linux has a chance to dominate here, and I think it does, it’s not only because it’s the superior choice for a low-cost, stripped-down machine, but also because companies like Asus and Acer offer it as an option. Seriously, simple as that.

A great many people still have no idea that Linux exists as an option on the PC — like the school teacher who discovered students playing with it and became concerned that they were up to no good. She emailed the Helios project leader saying “At this point, I am not sure what you are doing is legal. No software is free and spreading that misconception is harmful. These children look up to adults for guidance and discipline. I will research this as time allows and I want to assure you, if you are doing anything illegal, I will pursue charges as the law allows.” Yikes.

Perhaps we Linux zealots should downgrade our expectations even further and simply predict that the upcoming year will be the one when people discover Linux exists and that they have a choice. Hard to see how it can take over the desktop if people don’t know about it.

Happy holidays and best wishes for the new year.