Open source software is finally facing a challenge from its biggest opponent, writes Karlin Lillington.

In a clear sign that the stakes are rising, Microsoft has at last got serious about directly confronting the positive hype over Linux and other open source software.

In recent months, Microsoft has brandished studies that it claims show Windows getting the thumbs up over Linux on a range of points from total cost of ownership (TCO) to security.

The company has also begun to go to the corporate market - most recently with a 2,600 word mass email from CEO Steve Ballmer - with arguments that challenge open source operating system (OS) Linux head-on, a crucial shift in strategy from a company that once chose to ignore, then downplay, any threat.

It isn't exactly a corporate battle - while Microsoft is a single corporate entity, the open source side is a sprawling conglomeration of smallish companies offering software that subscribes to the open source philosophy of freely available product code. Linux is the standard bearer for what many term the open source "movement" - but there are several versions, or "distributions", of the OS.

At the heart of the debate is a Yankee Group independent study from April which concludes: "despite the hype, Linux is not superior to UNIX and Windows Server 2003." In addition, it pointed out the defections to Linux have come primarily from UNIX users, not Windows, in a market where Microsoft holds 66 per cent of the enterprise OS market, Linux, 20 per cent, and UNIX, a sliding 8 per cent.

An older IDC report, commissioned by Microsoft, argued that Windows offered lower TCO than Linux in most situations except for small companies and as web servers.

But at the moment, Microsoft is boiling down its Linux and open source message to three key points reiterated by Mr Ballmer in his late October email: "The facts show that Windows provides a lower total cost of ownership; the number of security vulnerabilities is lower on Windows; and Windows responsiveness on security is better than Linux; and Microsoft provides uncapped IP indemnification of their products." Open source is also more about a political or philosophical stance than a business decision, argues Mr Joe Macri, country manager, Microsoft Ireland: "Open source is more about the recipe than the cake." If a philosophy is going to influence OS decisions, so be it, he says, but he doesn't feel it makes a good business decision, especially if taxpayer money is involved.

The TCO arguments are based primarily on the IDC study, which predicts an 11 to 22 per cent savings over five years using Windows over Linux. Most of the cost savings are attributed to staffing costs, as it is easier to find people trained to use Windows than Linux. But Microsoft argues there are other savings as well over time.

The TCO argument is disputed by open source advocates. Mr Mel McIntyre, managing director of Dublin open source services company OpenApp and chairman of OpenIreland, an open source forum, says the studies are quoted selectively to highlight the parts beneficial to Microsoft. "TCO is a very complex subject, dependent on who you are and what you're doing," he says.

But he also argues that TCO is not the primary issue with open source: freedom is. "It's the ability to add and modify applications, where the software licence is protecting the user, versus Microsoft, where it's protecting Microsoft." Professor Brian Fitzgerald, who heads an EU open source project called Calibre at University of Limerick (see sidebar), says the training costs issue "doesn't factor in the number of students coming out now with open source experience" who will provide a future pool of expertise.

Gartner research director Mr Nikos Drakos says it is hard to make blanket statements about operating systems and applications because every business case is different. "It is difficult to argue that Google and Yahoo [ two Linux-users] are not saving money because they're using Linux," he says, but in particular situations, Windows or UNIX could be the better costs option.

Mr Drakos believes Microsoft's security and vulnerability argument "is shakier", based on a single study (by Forrester) and adds: "The comments were taken selectively."

Mr Macri says Microsoft has put in place a structured system for dealing with vulnerabilities each month and streamlined the process for addressing vulnerabilities. Mr Drakos adds that the lack of similar structure and process is a weakness for open source software and needs to be addressed.

Mr Macri also argues that open source software does not guarantee interoperability with third-party software. Linux advocates have complained about this issue, most specifically for desktop applications.

But Mr Kranos notes that interoperability "is a murky story", with companies adhering to different sets of interoperability standards. Microsoft is licensing code in such a way that interoperability will be increased in the case of third party proprietary software but closed off for open source software, he says.

Mr Ballmer's final point is centred on an ongoing legal battle spearheaded by a US Linux distribution company called SCO, which acquired the rights to early UNIX code that it says went into Linux, a patent infringement by Linux. It is suing IBM for $1 billion for using Linux and says it will sue other companies as well.

This leaves a cloud of uncertainty hanging over the OS, though open source advocates say they don't believe SCO has a case. Mr Macri says that Microsoft indemnifies all its customers against any liability in any patent disputes. Mr McIntyre says that with large companies like Novell, IBM and Oracle advocating Linux, other companies have little to fear.

Mr Kranos says Gartner issued a caution to its clients recommending they consider "the extra IP [ intellectual property] risk" if they were using Linux. But he is not aware of a single case where minds were changed based on the IP issue, he says.

Overall, says Mr Kranos, Microsoft is finally taking a public stance on the open source issue, something he believes it should have done long ago. But as any gambler would note, it's still all to play for. Even if the real (and ignored) story so far has been that of UNIX losses versus Linux gains, Microsoft knows it is time to man the battlements.