Knowledge@Wharton: “Today [Steve] Ballmer sees two major competitors for Microsoft — the open source software movement and advertising-supported software. According to Ballmer, the threat comes not from specific companies, but from the business models represented by these two trends. ‘Right now, the emblem of the first one is Linux and the emblem of the second one is Google. But it’s not the companies, it’s the phenomena’ that present the greatest challenge to Microsoft.”

Microsoft is very good at competing against companies, but how do you compete against “phenomena”? That isn’t as clear. (Jonathan Schwartz wrote about this in 2004.) And at least, from Microsoft’s perspective, the second phenomena is emblemized by a company. Linux isn’t even a company. The usual tactics won’t work.