While Linux hasn’t displaced Windows, it has made serious inroads. Linux accounted for 27 percent of new worldwide operating-system licenses in 2000, and Microsoft captured 41 percent of new licenses, according to IDC.

Overall, Gartner estimates Linux runs on nearly 9 percent of US servers shipped in the third quarter of 2000, with worldwide projected Linux server sales of nearly $2.5 billion in 2001 and about $9 billion in 2005.

But Linux continues to gain credibility, particularly because of the massive support provided by IBM, which has pledged to spend $1 billion on Linux development.

In attacking Linux and open source, Microsoft finds itself competing “not against another company, but against a grassroots movement,” said Paul Dain, director of application development at Emeryville, California-based Wirestone, a technology services company.

“My guess is that they are now under pressure to defend themselves against the criticism from the open-source and free-software communities--whether it’s justified or not--as well as companies like IBM that are aggressively marketing Linux,” Dain said. “In order to combat that, they have to use strong language to get their point across.”

Increasing Linux use makes it more difficult to spread the .Net message. That, in turn, has led to a string of comments from Microsoft executives publicly denouncing Linux and open source. “Linux is a cancer that attaches itself in an intellectual property sense to everything it touches,” Chief Executive Steve Ballmer said in an interview with the Chicago Sun-Times.

Despite Microsoft’s criticism, the company still uses open-source code in some products. Servers for the company’s Hotmail e-mail service use FreeBSD for some DNS (domain name server) functions.

“This is a legacy issue that came from Hotmail when we originally got it,” said Microsoft spokesman Rick Miller. “We haven’t gone out, purchased and put into place FreeBSD. It came when we purchased other companies. We didn’t build any of our infrastructures on FreeBSD. We build it on Windows.”