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This article is pure speculation.

Yes, the whole article concerns enterprise middleware stuff. "But we dominate the desktop" is not an answer to the problem being posed in the article. Share prices depend to some degree on forecasted growth, and when you already have 90% share of some segment, people want to hear about what you're going to do for an encore. Upgrades are nice, but that's not revenue growth, that's just treading water. It's damned hard to grow a $30 billion company; you have to go take over new markets, and they have to be big.

Desktops in China is big, but you have to convince people that you can get money out of those guys, instead of just having them rip you off. So far there's a lot of hot air in that direction, but little else.

Microsoft appears to be doing OK in the middleware market, but they aren't burning up the world, and that pesky linux just keeps coming. People are starting to ask some hard questions about that; it's to be expected.

Of course it is. It's not ill-founded speculation, though. If in fact it comes to pass that half of all servers installed in 2007 are running linux, securities analysts (and shareholders) will be asking some hard questions about why Microsoft would ignore half the middleware market.

As I said, it would be foolish for any company to ignore a potential market; that said, entering a new market has to be weighed against cannabilizing your existing markets. Sun is offering Linux on some of its new boxes. That will pose a challenge to the company since it will probably have some of its customers moving away from higher-priced hardware in favor of "good enough" hardware running Linux. An even better question is "Why choose Sun at all?" Microsoft has a similar issue with Linux. If it moves Exchange or SQL Server to Linux, it will lose some Windows license sales. It wouldn't necessarily just grow market share on Linux. There's usually some kind of tradeoff involved. I wouldn't say that it's a clear-cut decision.

Desktops in China is big, but you have to convince people that you can get money out of those guys, instead of just having them rip you off. So far there's a lot of hot air in that direction, but little else.

I think that software companies are wasting money on China. The Chinese culture doesn't embrace the notion of intellectual property at all. This is apparent from their rampant piracy of movies, software, and other forms of content. It isn't surprising, then, that eastern Europe -- former Soviet communist satellites -- have a similar issue with intellectual property. Hardware vendors have a market (it's tougher to pirate hardware) but I doubt that China will be viable to software developers for another 20-30 years. It's simply that far behind the curve in terms of individual wealth and income. Things won't change until it evolves into a modern industrialized nation.