Rob Enderle has published an opinion piece about the effect that Linux has had on Microsoft as an organization and a software provider. I've extracted a couple of quotes and emphasis added is mine.
Think about it: For decades we have surveyed companies and for decades, except for those who are actually in the software business, the vast majority have said they don't want to be in the software business. Yet open source, as it is supposed to be practiced, puts you squarely in the software business.
As I look at how Microsoft is changing to address the Linux threat, one that may actually turn out to be no more real then Netscape's was, I can't help but see how Microsoft has dramatically benefited from it -- and much more broadly so than they did from the rise of Netscape.
Now look at Microsoft. They have adjusted prices downwards... They have improved the quality of their products... The products are vastly more secure and are wrapped with an infrastructure of services that makes them much harder to penetrate and vastly more capable. ...Patching is largely automatic, problems with hardware have all but been eliminated, and much of the development and break fix processes have been fully automated with testing that is magnitudes better then it was only four years ago. ...An example is its Shared Source Initiative which provides source code to an ever-increasing group of companies that feel they need to look at source, something that Microsoft would never have even considered a few years earlier.
Finally, we know that what is largely holding the open-source community together is a dislike for Microsoft. As Microsoft improves, the reality of what Microsoft is will slowly penetrate the increasingly artificial reality that the open-source community has created
Wow. This one is going to cause some water cooler talk. Being a Microsoft guy, writing under my Microsoft name, you're going to think twice about what my opinion is on this one, but I think it is great to see someone saying what we've been saying for a long time now. In terms of the classic Colgate commercial, let's say that the anti-Microsoft sentiment in the developer community caused by Linux is the piece of chalk, and all the improvements that Microsoft has made to its offerings due to the Linux effect is the purple staining solution that the chalk is dipped into. It will still take a while to continue to penetrate the larger community, but sooner or later people will start to speak about the lack of clothes on the Emperor. Martin Taylor's role at Microsoft is one other example of this reaction within Microsoft.
What do you think? My opinion is that the ship will never reach the point where course adjustments are not needed, and that there still need to be voices internally and externally to raise the right issues, but I've also been impressed with the changes that Microsoft is trying to make, and the scope of the organization involved in making these changes.