If I were Microsoft, I'd be holding my new Surface 2 tablets with very shaky hands. Yesterday, Valve Software announced SteamOS, a free, Linux-based operating system to support its "app store," Steam. For more than a decade, Steam has primarily been a Windows application, relying on the OS's historically large gamer population to build up an enormous business that now supports thousands of computer applications and games. Now it's taken a major step toward cutting Microsoft out of the equation entirely, and I predict it will cause a major shake-up in the operating system business.
That business is already a pretty shaky environment. Most of us spend our desktop days clicking not on various icons and folders but on links on websites. If you're on a PC, or a Mac, or Linux, the websites generally look about the same. A modern OS is only as good as its applications.
Only recently, with Windows 8, has Microsoft taken steps toward revamping the way its OS users acquire and run applications. So far, it's not going too well. The Windows Store doesn't have the breadth of Apple's or Google's app stores, or even the simplicity of Ubuntu's. Add in that users are expected to pay for this decidedly subpar experience, and there's a great opening for a dark horse to swipe Microsoft's business. Valve has done just that with SteamOS, making a grab for what is arguably Windows's final area of near-complete dominance: gaming.
SteamOS is a game-centric operating system as of now, but it's unlikely to stay that way. Steam got into the desktop application business a year ago, peddling financial assistance and creative applications, and there's no reason to assume it won't continue to expand. It's a proven platform for application sales with a library of more than 2,200 games and applications—no small number for what has largely been a games-only distribution method—and a decade of experience behind it. With its financial might and technical track record, it will have a lot of heft in convincing application developers to support Linux.
If that happens on a large scale, we might see software companies that have had little reason to support Linux, such as Adobe or Apple, join the newer, cooler party.* This would be really, really bad news for Microsoft.
Valve has a couple of more announcements set for this week regarding its Steam-related future plans. Microsoft can only hope that they're not going to announce an Office competitor.
*Correction, Sept. 24, 2013: This blog post originally and incorrectly said that Dropbox does not support Linux. Dropbox supports Linux now.