Hold on to your hats; Microsoft has just made a radical change in business model. A couple of months ago I wrote about the competitive advantage that firms using Linux and Amazon’s EC2 cloud computing had over their competitors.
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Server-on-demand providers like Amazon’s EC2, Joyent,
and others have reduced the capital necessary to launch scalable,
server intensive businesses. Google has just launched a similar
on-demand service, and companies like RightScale and CohesiveFT are building mature businesses around managing EC2 configurations.
Facebook applications are just the most extreme example of business initiatives that can be scaled on demand from $70/month on one EC2 server to $10,000/month on many dozens of servers running web, application and database server clusters and farms. Compare that with the old school of investing in a large data center with a significant fraction of the hardware and bandwidth that you might need if your business is a success. What used to cost $100k in capital can now be done with just a few hundreds of dollars.
And it’s all possible as long as you are using a unix variant – Linux for the most part – to power your apps. So there is a whole class of companies out there using Linux that can out compete their Windows-using rivals – again, the capital they need to launch is much smaller because of cloud computing. That means Linux will win among the class of young entrepreneurial businesses that are so vital to the US economy.