Four Out Of Five Linux PCs End Up Running Pirated Windows

Although Linux backers boast of a growing market share on the desktop, especially in booming regions like Eastern Europe, Latin America, and Asia-Pacific, those numbers are hugely inflated, a research firm said Thursday, because most of the PCs actually end up running Windows.

But those Windows are bogus copies, not the real deal, said Annette Jump, a principal analyst with Gartner's U.K. office, who finds a direct connection between piracy and Linux.

"About 80 percent of systems pre-loaded with Linux in 2004 will end up running a pirated copy of Windows," she said.

Windows' high price is driving overseas system integrators and hardware vendors to install Linux, the for-free open-source operating system, Jump said, to keep prices down. The $80 or so that Microsoft charges for a legitimate copy of its OS can account for 15 percent or more of a typical PC's price in many foreign markets. Two-fifths of the machines shipped with Linux don't even make it into users' hands before a counterfeit copy of Windows is slapped on the drive. Another two-fifths eventually get Windows, often after consumers ask a technically-astute relative or friend to install the Microsoft OS, or after small businesses retrofit the PCs themselves.

"System integrators put Linux on as a way of staying legal and avoiding Microsoft," said Jump, even though they later install a pirate Windows or know the end user will. "Few will admit this outright, but that's what they're doing."

PC builders are taking advantage of the large-scale counterfeiting of Windows, and the ultra-low price of pirated versions, she said, to sell cut-rate machines that ultimately run Microsoft's operating system, not Linux. "The widespread availability of pirated versions of Windows at a fraction of the cost of a legal copy [artificially] stimulates the growth of Linux on PCs in emerging markets," Jump wrote in her report.

The trend is most evident in regions where Windows counterfeiting is rife, and not coincidentally, where Linux seems to be growing in popularity. According to Gartner's data, 10.5 percent of the new PCs shipped this year in the Asia-Pacific region will have Linux pre-installed, but Linux's share of OSes in use -- and there's a difference -- is a much smaller 2.3 percent. The same holds true in Eastern Europe (where 12.3 percent of PCs have Linux pre-loaded, but only 2 percent use it) and Latin America (12.5 percent and 0.8 percent).

The percentage of pre-loaded Linux boxes that are turned into pirated Windows machines will fall over the next four years, said Jump, because Microsoft is finally turning its attention to the counterfeiting-Linux threat by putting out low-cost, scaled-back editions of its OS. Dubbed Windows XP Starter Edition, it's slated to pilot in Indonesia, Thailand, and Malaysia next month, and in Russia and India in 2005.

"For a long time, Microsoft closed its eyes to counterfeiting, actually preferring that users turned to phony versions rather than go to Linux," said Jump. "It didn't want to push people to Linux even more than they were already heading."

Starter Edition, said Jump, is a sign that Microsoft recognizes the problem and is planning to fight for OS share on new PCs, with special emphasis on targeting those shipped with Linux.

"It's likely that Microsoft would prefer the initial OS on a new PC to be a Windows variant rather than Linux, even if piracy were to continue. This would reduce the amount of interest that Linux is generating, might allow Microsoft to generate revenue from machines that would otherwise be shipped with Linux, and lock users into other Microsoft products," said Jump.

By 2005, Gartner estimates, only about three-quarters of the PCs shipped with Linux will be running Windows; that's expected to drop to around half by 2008.

"Despite some regional variations, Linux continues to be a niche OS, with a 1.3 percent share of installed PCs worldwide in 2004," said Jump. Even as late as 2008, Linux will be used on only 2.6 percent of the world's PCs.

"That would make its share the same as that of the Mac OS," she said.