Microsoft Warms Up to Former Rival Linux

On Monday, legacy tech giant Microsoft Corp. (MSFT) announced that it will use the Linux operating system, not its own Windows operating system, for new security features for web-connected Internet of Things (IoT) devices. (See also: Microsoft to $1 Trillion in 12 Months: Morgan Stanley.)

The decision marks the first time ever that the IT behemoth will distribute its own version of Linux, a free open-source operating system that Microsoft once viewed as a "cancer," and the single largest threat to the dominance of its Windows software. The news came as part of the Redmond, Washington-based company's larger announcement unveiling Azure Sphere, a new technology designed to protect the tiny processors that serve as the backbone of connected devices such as smart appliances, connected toys and other gadgets. 

To power Azure Sphere, Microsoft has developed a custom version of Linux as it seeks to secure the billions of new endpoints ripe for cybercriminals. "After 43 years, this is the first day that we are announcing—and will be distributing—a custom Linux kernel," stated Microsoft President Brad Smith at an event in San Francisco. 

CEO: 'Microsoft Loves Linux' 

While the IoT revolution has taken the tech industry by storm, cybersecurity offerings have been slow to catch up with the trend. Linux will be part of Microsoft's multipronged approach to make its IoT offerings more secure for customers, using hardware, software and the cloud. Smith indicated that the first Azure Sphere-powered hardware will hit the market later in 2018, at which point the company will provide more details. 

The news is reflective of a larger shift at Microsoft as it moves away from legacy businesses, such as its Windows franchise, instead doubling down on innovation and new growth markets such as the IoT, enterprise collaboration and cybersecurity. When Chief Executive Officer (CEO) Satya Nadella took the helm in 2014, he announced "Microsoft loves Linux," allowing for Linux support on the Azure cloud platform and letting developers integrate Linux with their copies of Windows 10. 

In March, a management shakeup at Microsoft resulted in the departure of one of the leader's of Microsoft's Windows organization from the senior leadership team. As a result, employees of the group were split across other teams. (See also: Microsoft to Gain on New Enterprise Buying: Bulls.)

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