Five years ago, Steve Ballmer felt compelled to shake the Microsoft rank-and-file out of a worrying sense of complacency. A disruptive new competitor was forcing the software company to “challenge old habits and seriously rethink business-as-usual,” he warned in an internal e-mail.

The Microsoft chief executive was right to be worried. He was wrong, however, about where the real competitive danger lay. The source of his fears at the time was the Linux open source operating system.