What Microsoft's New Love for Linux Says about Open-Source Tech

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Part 3
What Microsoft's New Love for Linux Says about Open-Source Tech PART 3 OF 10

How Microsoft Is Taking Further Steps toward Linux

Microsoft is increasingly turning toward Linux and open-source software

Earlier in the series, we discussed certain aspects of Microsoft’s (MSFT) recent announcement that it would release an SQL Server version for Linux.

Linux, an open-source operating system, has an appeal as a target platform. It’s not only economical but also very well suited to and understood in the current cloud environment. In 2012, Microsoft announced support for Linux on its cloud-computing platform Azure.

How Microsoft Is Taking Further Steps toward Linux

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During a cloud-focused meet in 2014, Microsoft’s CEO Satya Nadella declared, “Microsoft loves Linux.” In mid-February 2016, Microsoft announced that more than 60% of MS Azure images are Linux-based. Also, approximately 25% of servers running with MS Azure are powered by Linux.

Microsoft intends to make its enterprise software offerings compatible with Linux environments so that developers and open-source users who prefer to have alternatives would consider Microsoft a choice.

Microsoft, which has shown a reluctance in the past to support the open-source software movement, has now changed its strategy. With its Windows 10 announcement in January 2015, the company made explicit references to the makers and developers who build hardware and software for everyone.

Why open source is gaining traction

Apart from Microsoft, Oracle (ORCL), IBM (IBM), and Salesforce.com (CRM) are also rapidly flocking toward the open-source space. In late December 2015, Oracle acquired StackEngine, a docker container startup. Docker is an open-source container software project.

With the advent and arrival of the SMAC (social, mobile, analytics and cloud) revolution, open-source databases are rapidly gaining ground in the database space. A primary reason companies are migrating to open-source software is that they want to avoid proprietary software and have the freedom to change their systems at their convenience. Open-source software is also gaining popularity because it allows businesses to lower their software costs.

Investors who wish to gain exposure to Microsoft could consider investing in the SPDR S&P 500 ETF (SPY). While SPY invests ~2.4% of its holdings in Microsoft, it also has an exposure of ~8% to application software.


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