Forgive The VAR Guy for saying it: But he told you so. A few months ago our resident blogger predicted Netbooks -- the name for an emerging market of sub-notebooks -- would increasingly shift to open source and put the squeeze on Microsoft. Fast forward to the present, and Microsoft is already feeling the heat from Netbooks. Here's the scoop.

According to Barron's, Microsoft's most recent quarterly results revealed weaker-than-expected client momentum because more and more PC market growth involves Netbooks.

Now, for the twist: It's no secret that multiple Linux distributions -- particularly Canonical's Ubuntu and Novell's SUSE Linux, among others -- have gained major momentum on Netbooks. In response, Microsoft has had to cut its Windows OEM prices to make sure Windows is a major force in the Netbook market.

The VAR Guy predicted in July that Netbooks running Linux would proliferate the market. It's already happening.

How much does Microsoft charge Netbook makers for Windows? Alas, The VAR Guy must concede that he doesn't know for sure. But clearly, given Microsoft's latest financial statements, the move to new hardware form factors coupled with open source is causing the software giant some pain.

But don't weep too long for Microsoft. In its financial results, Microsoft said it had more than $20 billion in cash and expects to generate at least $2 per share in profits for its current fiscal year.

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