I only mentioned Parallels Inc. last week, en passant, while I was discussing Apple’s next version of OS X. I never had time to look into what Parallels has, because I only picked up the news about Parallels Workstation software the day I was writing the blog. This week I took a look. What Parallels has is Microsoft’s worst nightmare.

Quite simply it is what I expect Apple to provide—the ability to run Windows-in-a-box, a little like the old DOS box that runs in Windows. The main point to note is that when you run it, it looks like OS X is the master OS, and that’s not surprising because Windows is running in a virtual machine. If you just see a screen shot of this you quickly get a sense of what it means. If Apple wasn’t going to virtualize Windows, just one look at Parallels’ capability would change Steve Jobs mind anyway.

Unfortunately for Parallels, Apple will probably provide this capability. What I hadn’t appreciated until I saw it with my own eyes is that it completely destroys the Microsoft lock-in. “… and with one bound, the consumer was free”.

This is the point that commentators like John Dvorak (who’s been watching the PC market forever and who correctly predicted Apple’s move to Intel) and Rob Enderle of the Enderle Group are missing. Both of them have been flamed mercilessly by the Apple devout for suggesting recently that Apple might eventually drop OS X and OEM Windows instead. You’ll see icebergs floating down the river Styx before that happens.

It is now possible for Windows to share a screen with OS X. So now, Apples will surely be compared with apples, and the Apples will win. A door stands open on the North wall of the Windows penitentiary. Now you may think that this is a two-way door, but it isn’t. Aside from the obvious fact that few people will want to break into prison, this door doesn’t swing both ways. Windows users will be able to migrate to Apple easily enough, but it will be difficult for Apple users to move in the other direction. OS X will only be available on Apple. (Apple wont sell OS X on any other hardware any time soon—it makes no business sense). And that puts the boot firmly on the other throat.

Perhaps Microsoft is about to experience its ‘mainframe moment’, like IBM did around 1990.

You may think I’m being a bit ‘previous’ here, and I am. But Parallels doesn’t just provide a capability for OS X, it also provides the same capability for other PCs. You can virtualize Linux from Windows. You can virtualize different versions of Windows. What is happening here is that the PC operating system is being reduced to a GUI.

So may the best GUI win.