In its annual filing with the U.S. Securities and Exchange Commission (SEC), Microsoft Corporation said on Friday that it sees the freeware operating system Linux as a major threat to the dominance of Windows. Currently, over 90% of all computers now in use run Windows while 97% of all new computers sold come with Windows. Linux, which is developed by volunteers and advocates from around the world, is the leader of the "Open Source" (think "free" programs and source code) movement. In recent years, Linux has surpassed the Macintosh to become the number one threat to Windows and, in fact, Linux is the only operating system that is significantly growing marketshare right now.

"Over the past year the Linux operating system has gained increasing acceptance, and leading software developers such as Oracle and Corel have announced that they will develop applications that run on Linux,” Microsoft wrote in the filing.

The SEC hasn't yet posted the complete filing to its Web site, so I'll probably have more on this when they do