Microsoft acknowledges Linux threat

Microsoft says 2005 could be a difficult year, as Linux continues to pinch customers from the software giant.

In a report filed with the US Securities and Exchange Commission, the company says it recognises the threat posed by its open source competitor. "We continue to watch the evolution of open source software development and distribution. We believe Microsoft`s share of server units grew modestly in fiscal 2004, while Linux distributions rose slightly faster on an absolute basis," the filing said.

"The increase in Linux distributions reflects some significant public announcements of support and adoption of open source software in both the server and desktop markets in the last year. To the extent open source software products gain increasing market acceptance, sales of our products may decline, which could result in a reduction in our revenue and operating margins."

The company mentions in the report that sluggish PC sales will also hamper its progress. "For fiscal 2005, we believe industry-wide factors such as PC unit growth and the success of non-commercial software could significantly affect our results of operations and financial condition."

According to news.com, Microsoft has embarked on a drive to cut $1 billion off its operating costs.

IBM will release a low-cost disk server targeted at midsize companies looking to establish storage area networks.

The DS3000 is based on ISCSE technology, which is cheaper than fibre-channel-based storage area networks. The company also unveiled the DS400: a 5.25-inch tall, 2GB Fibre Channel storage system. Both systems can be managed with RAID (redundant array of independent disks) management tools, and both run on Windows and Linux, the company says.

The DS300 will sell from $3 000 (R19 500), while the DS400 server will start at $5 250 (R34 000).

The company will also change the name of its midrange storage arrays from FastT storage servers to DS4000 midrange disk systems, and has announced the new software for the product line.

According to CNETAsia, Big Blue`s DS4000 Storage Manager V9.1 software is designed to protect information via real-time data replication. The software lets customers mirror data both synchronously and asynchronously. It is free to existing customers and can be downloaded from the company`s Web site.

A trademark infringement suit filed against Internet search giant Google and Overture Services can proceed, a federal judge in Virginia has ruled.

Google and Overture had moved to dismiss the case, brought forward by Government Employees Insurance Co (GEICO), but judge Leonie Brinkema dismissed the motion, PCWorld reports. If the lawsuit is successful, it could potentially cripple the search advertising engine - which involves sponsored links - that has fuelled the company`s growth.

GEICO is suing both companies for selling rights to its trademarked name to advertisers, alleging trademark infringement, false representation and trademark dilution under a federal trademark statute known as the Lanham Act.

GEICO says it is pleased with the judge`s decision not to dismiss the trademark and unfair competition claims.