Could Linux Open Doors for the Inventor of Windows?

Recent and predicted movements in the Linux arena could lead to a new revenue stream for Microsoft. Red Hat is arguably the dominant player in the open source Linux marketplace. All cloud providers, including Amazon Web Services, Microsoft Azure and Google Cloud Platform, offer Red Hat Enterprise Linux as a standard offering. In fact, there are rumors that Google might acquire Red Hat. Microsoft might also be interested – although a bidding war with Amazon could open up.

However, it’s unlikely Microsoft would be allowed to bid on the firm due to antitrust concerns. Such an acquisition would make Microsoft the owner of the two most popular server-based operating systems: Windows Server and Red Hat Enterprise Server.

Microsoft Money

However, this doesn’t preclude Microsoft from creating and promoting its own Linux option. Since Linux is the open-source variety of Unix, any vendor can create a custom Linux alternative. Many have done so, including SuSE and even Amazon.

Microsoft has also done just that, albeit on a small scale. On April 16th, Microsoft announced Azure Sphere, a Linux O.S. geared towards MCUs — which are low-powered microcontrollers — targeted at the Internet of Things community. This is hardly a full-scale attack on Red Hat, but it is a first step.

With Azure Sphere (not to be confused with VMware vSphere), Microsoft can learn and invest in Linux, even more than as a reseller of Red Hat. They can attract Linux developers, and if anyone can “throw money at the problem,” it’s Microsoft.

Don’t expect Microsoft’s Linux to become available on AWS or Google Cloud. Those vendors have no interest in letting Microsoft gain another foothold in the operating system space. Microsoft’s long-term goal would likely be to offer both Microsoft Windows Server and Azure Sphere as the preferred Azure operating system platforms. Those underlying technologies, combined with its own SQL Server database, would effectively box out competitors and let Microsoft earn the lion’s share of software licenses in the cloud, instead of reselling Red Hat.

Google’s Play?

This makes it more likely that Google will want to acquire Red Hat, to be able to control more of the infrastructure it offers. AWS also offers Aurora, their internally-built alternative SQL database, and of course, sleeping giant Oracle controls a large part of its software stack, with ownership of Oracle Database, MySQL and Solaris, thanks to its acquisition of Sun Microsystems.

Enterprises may soon be faced with a choice. Are they comfortable using the cloud infrastructure, operating system, and database software from a single firm, or should they seek to reduce dependence on any particular vendor, to eliminate lock-in. Obviously, there are economies of scale, such as Microsoft’s Hybrid Use Benefit which allows Windows and SQL Server licenses to carry over to the cloud, as long as that cloud is Microsoft’s Azure.

At the same time, if Google were to acquire Red Hat, would the operating system continue to be promoted or even supported by AWS? We have seen fights between Google, Apple, and Amazon over Chromecast, Apple TV and Amazon Prime, with vendors pulling competitors’ offerings from their distribution channels. Customers benefit from choice and it would seem that an independent Red Hat, or at least one not acquired by one of the three major cloud providers, would be in the interest of end users.

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