Can't compete w/ free product?
Look for this to happen more often.
PGP is essentially a desktop utility. It's not the sort of thing you can expect to get a large markup for. Moreover, a functional equivalent, [link|http://www.gnupg.org/|GNU Privacy Guard], is available, free of charge, with full source, as free software. In the security market (technically proficient individuals, TPIs, acronymized as G-E-E-K-S), there's no question of which option is preferred.
I expect to see this happen more and more frequently as we move forward. The small utilities market is already pretty slim pickings, and frankly, I'm not familiar with most of the Windows utility market these days, but word is that Cygnus is making inroads on the platform (there's a Debian-Cygwin "port" in the works). If free software is successful enough, it could coopt much of the application space that's not already claimed by Microsoft. In particular, the networking space, and such application niches as X Terminal emulation.
Does this hurt Microsoft? Possibly. One of the things MSFT has done to curry favor is to share the table scraps of application space it hasn't allocated for itself, with a small set of chosen "friends". Free software has the power to appropriate this space. Microsoft can try to break functionality in some way, but it's somewhat constrained: it's operating under threat of a DoJ settlement, as well as continued legal action from Europe and US State AGs, as well as an unspecified number of companies which may be able to saddle the company with anticompetitive claims. It's also stuck having to provide NT/2K - UNIX compatibility (and the current standard Unix is GNU/Linux). An application ported to Cygwin is very close to working under UNIX Services for Windows NT, or UWIN, or MKS.
Moreover, it's not just the table scraps. Free software can compete directly with Microsoft. There are two paths to the Windows desktop. Some applications have chosen the native port approach: create a Win32 application. And several apps have done this: vim, the GIMP, AbiWord, StarOffice. However, operating under emulation or compatibility mode is another option. With a full "Linux" port to a 'Nix-on-Win package, a full suite of applications is available: the KDE desktop, GNOME, networking tools, development suite, the whole shebang. And that's competing directly with Microsoft, on the platform they "own".
Interesting times.
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Karsten M. Self [link|mailto:kmself@ix.netcom.com|kmself@ix.netcom.com]
What part of "gestalt" don't you understand?