"I think that Microsoft will increasingly feel margin pressure from Linux as well as people saying: well actually the applications that really matter to me are not on my PC. And so they're going to be able to extract less of a monopoly rent, so to speak"
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Margin pressure is the polite, publisher-friendly way to say: the empire is going to have to live like a normal country. Tim O'Reilly’s line lands because it frames Microsoft’s vulnerability not as a grand moral reckoning but as a shift in where value accrues. The killer move is the phrase “monopoly rent, so to speak” - a wink toward economics jargon that also smuggles in an accusation. Microsoft’s profits aren’t merely the reward for building good software; they’re the tolls of gatekeeping. O’Reilly is naming the business model without staging a courtroom drama.
The context is the early-2000s pivot: Linux maturing from hobbyist credo into enterprise reality, and the web beginning to unhook “what matters” from the Windows desktop. He’s not predicting Windows disappears. He’s predicting Windows stops being the place where leverage lives. When applications migrate off the PC - into browsers, servers, and later the cloud - the operating system becomes plumbing. Useful, necessary, but harder to overcharge for.
There’s a second, quieter argument: competition doesn’t just arrive as a better substitute; it arrives as a change in architecture. Linux threatens Microsoft on price and flexibility, but the deeper threat is that users stop caring about the platform altogether. O’Reilly’s intent is to push readers to see “open source” not as ideology but as market physics: once switching costs drop and the locus of computing moves, monopolies don’t get toppled - they get discounted.
The context is the early-2000s pivot: Linux maturing from hobbyist credo into enterprise reality, and the web beginning to unhook “what matters” from the Windows desktop. He’s not predicting Windows disappears. He’s predicting Windows stops being the place where leverage lives. When applications migrate off the PC - into browsers, servers, and later the cloud - the operating system becomes plumbing. Useful, necessary, but harder to overcharge for.
There’s a second, quieter argument: competition doesn’t just arrive as a better substitute; it arrives as a change in architecture. Linux threatens Microsoft on price and flexibility, but the deeper threat is that users stop caring about the platform altogether. O’Reilly’s intent is to push readers to see “open source” not as ideology but as market physics: once switching costs drop and the locus of computing moves, monopolies don’t get toppled - they get discounted.
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| Topic | Technology |
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