"Messages that criticize OSS (open source software), Linux and the GPL (general public license) are NOT effective," the memo declares, as if the most basic of truths must be issued in memo form to sink in.

It is clear from the memo (not that it wasn't already crystal) that Microsoft feels fear and loathing toward Linux -- maybe more fear than loathing at this point.

The software giant went so far as to conduct a telephone survey of IT workers across the globe regarding open source. That shows a little weakness in the knees.

Hollywood Plot?

That Linux would seriously threaten Microsoft is a Utopian dream that I never would have expected to be realistic.

Imagine, a monopolistic giant threatened by a global community of volunteer programmers -- distributing free software. If I saw this in a Hollywood movie, I'd think it was hokey, just another smile-faced "bad guys beaten by sheer goodness" plot.

But it's happening in the real world. Part of this is Microsoft's doing. By continuing to play the corporate big dog -- as with its recent increase in enterprise licensing -- Microsoft creates an opening for the open source movement to grow into a powerful marketplace force.

Beating Free

The Linux advantage, of course, is that it's free. Even Microsoft can't beat free. The companies that make money from Linux, like Ximian, Red Hat and SuSe, generate income only by adding special features and providing support. And IBM also has lent its considerable weight to Linux, giving it credibility that a small fry like Ximian can't.

So far, Linux has made serious inroads only in the server market. In this small yet lucrative share of the overall computing sector, Linux holds an approximately 15 to 20 percent market share.

This is a smaller portion than Microsoft's share, but it is likely that Linux will overtake Microsoft in the server OS market in the foreseeable future.

Geeks at Home

But what really makes me smile is the $199 Lindows PC for sale at Wal-Mart (monitor not included). Now that Linux runs a family PC, it's not just for geeks anymore.

Microsoft, of course, went to court to stop Lindows from entering the marketplace, claiming trademark infringement. But upstart Lindows has, so far, survived legal challenges (and even effectively raised the issue of whether the term "windows" warrants trademark protection).

Lindows could use its open source pricing advantage (translated: its cheapness) to accomplish big things. With a PC whose price tag is less than that of Microsoft Office, this little box has revolutionary potential.

And as consumers get used to these machines -- and they will -- they'll expect this kind of pricing. That will put Microsoft in a tough spot (it will also put pressure on PC makers, but that's another story).

What will happen to Microsoft's market dominance when consumers realize they have dramatically lower-cost options? What's going to happen when these consumers, who are also workers and business owners, bring this knowledge to the lucrative business market? The next few years should be interesting.