Microsoft Sees Open-Source Threat Looming Ever Larger

Microsoft Corp. is facing growing pressure from open-source software across every segment of its business—a competitive threat that could have significant consequences for its financial future going forward, the software maker said in its latest 10-K filing to the Securities and Exchange Commission this week.

"We continue to watch the evolution of open-source software development and distribution and continue to differentiate our products from competitive products, including those based on open-source software. We believe that Microsoft's share of server units grew modestly in fiscal 2004, while Linux distributions rose slightly faster on an absolute basis," the filing reads.
Increase in Linux distributions reflected some significant public announcements of support and adoption of open-source software in both the server and desktop markets in the last year, company officials said.