Channel ambition is not a conspiracy

A monopolistic practice occurs when two sides are offering the same deal and one side gets all the business. But in this case both sides were not offering the same deal. Microsoft offered channel support, Linux a hearty handshake and rhetoric about freedom.

Dietrich H. Schmitz Dietrich T. Schmitz has posted to Groklaw a piece quoting my CompuTex coverage and claiming a dark conspiracy.

I hate to disagree, especially with someone boasting such a fine German name as Dietrich H. Schmitz Dietrich T. Schmitz(next to which Dana Blankenhorn sounds almost Irish*), but what happened at CompuTex was no conspiracy. (Note: Cut and paste, Dana. Don't copy names from memory.)

What happened at CompuTex was channel ambition.

MSI is trying to become a brand. Microsoft's channel support can make or break those efforts. Chairman Joseph Hsu has bet the company on a strategy of eating into HP and Dell, and Microsoft would like nothing better than to help him punish those two companies for straying from the Microsoft way.

The question is whether that is a conspiracy or sharp business elbows.

Schmitz calls it a conspiracy. Many here were enthusiastic about the possibility of the ARM chip powering Android phones and Netbooks, and saw their hopes dashed at CompuTex.

But as I noted during that show, a company gets twice as much from a PC with their brand on it as one they make for someone else. MSI needs this money to survive in a world where its Chinese partners can undercut them. The margin justifies MSI's existence.

It is also true that Linux cannot afford a presence in the channel. It's not how we roll. You can't invest in retailing if your product costs nothing. There is nothing to invest. That's why Linux and open source depend on the Internet.

A monopolistic practice occurs when two sides are offering the same deal and one side gets all the business. But in this case both sides were not offering the same deal. Microsoft offered channel support, Linux a hearty handshake and rhetoric about freedom.

There was some indication at CompuTex that Taiwanese OEMs like the rhetoric, as evidenced by the answer Li Chang gave to my own question. Given the habit of reporters there not to ask questions, and executives there not to answer them, what Mr. Li offered was a soliloquy.

But here's the deal. There's more to the Taiwanese market than MSI, Asus and Acer. There are literally dozens of OEMs over there looking for a taste of channel success.

What Linux needs to succeed is a way to offer more than was offered MSI.

The question is, how would you structure a deal?

* Before you send me a nastygram on the name joke, the name Blankenhorn is German, but my mom is very Irish.

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