Against whom is Linux competing?

Against whom is Linux competing?

Summary: It will take a major Linux vendor pairing up with a first-tier OEM and a major enterprise or government for Linux to make inroads on the desktop.

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In the closing of his article What Linux needs to succeed, Paul Murphy writes of Linux devotees:

Stop trying to make Linux look like Windows, don't put those [Windows] people in charge, and don't let anyone pretend that Linux is some kind of cheaper Windows replacement. Linux is what it is: Unix, and it takes different reflexes, different ideas about networks, about the role of the computer, about data storage, and about application management to make it work.

While I agree with a number of his conclusions (such as the relative strengths of Solaris, BSD, and Linux distantly followed by Windows), I think he misses the point.

Paul attributes the success of Windows as momentum from the "after effects of the initial PC adoption in rebellion against mainframe control practices" but Paul forgets that very little of what people do today with their Wintel workstation was ever done on the company mainframe. Before the IBM PC, most of the things MS Office does today were done on a typewriter or with a pencil and ledger sheets, and the results were presented with hand-drawn artwork published by a professional typesetter. Of course, very little done on today's personal computer was even thought possible on a mainframe in 1980, when the IBM System/370 was still king.

John Carroll challenges Paul's advice when he writes, in his article A recipe for the failure of Linux, "Linux would attract more Windows customers by figuring out what those customers like about Windows, and riding that wave into Windows' users homes."

John likens the problem to that faced by US automakers who can't seem to figure out why Americans prefer Japanese cars. (Ironically, my Honda was made in Ohio, the Chrysler Sebring -- which I almost bought -- was made in Mexico! Go figure.) Paraphrasing, he says, it's best to figure out what the customer wants and give it to them. Well good advice -- but WHICH customer?

John suggests that Apple got it right when they moved their MacOS product to BSD because they now offer what is arguably the best user experience around in a UNIX-based package, with all of the inherent advantages of UNIX underpinnings. Well, that's all fine and good but where exactly has this wonderful "new and improved" MacOS / UNIX marriage (known as Mac OS X) gotten Apple? Has it cut into Microsoft's market share? No. Why? Because technical superiority is not always enough. (Just ask the inventors of BetaMAX.)

Both Paul and John seem to think that Linux has been a failure because it hasn't made serious inroads into the Microsoft desktop juggernaut. However, I am sure that Sun, IBM, and others would disagree regarding the relative success of Linux in the marketplace. Any assumption that UNIX no longer plays a major role is also a false assumption as virtually all Internet infrastructure is built upon UNIX infrastructure. How is it then that, in many an enterprise, Microsoft Windows is the predominant server? Not UNIX? Not Linux? Not MacOSX? (After all, they are all based upon UNIX.)

While UNIX was doing what it does best throughout the last 35+ years, it continued to be geared to the needs of the network and the needs of technical people whose job it is to get the most out of expensive hardware and bandwidth -- and doing so with costly technical expertise available only from the nation's universities offering programs in computer science. In truth, other than universities, no one in the enterprise cared very much about UNIX until they needed to figure out how to use leverage the Internet to their advantage.

Throughout the 1990s, Microsoft continued to saturate the market with a one-stop personal productivity solution for consumers. Apple continued to offer a superior solution but consumers were not interested in paying premium prices for what were quickly becoming commodity products. The personal computer made its way into the enterprise for the very same reasons it made its way onto America's dining room tables. It was easy to use and inexpensive to buy. But Microsoft faced a dilemma ... it was quickly turning its only product into a commodity with low profit margins:

  • How could Microsoft take Windows to the next level? By adding value to its products through a network of Windows computers all linked to Windows servers.
  • How does Microsoft make this solution more attractive than a similar UNIX solution? Two ways: By offering services not available via UNIX -- proprietary solutions. By making them less expensive to maintain by offering inexpensive training for non-technical people.
Today, high-performance UNIX hardware continues to be largely proprietary in nature and the skill set to maintain UNIX environment requires a degree in computer science and/or years of experience. Yet, anyone with a few hundred dollars and a high-school diploma can be trained in a matter of weeks to administer a Windows server based upon an off-the-shelf x86-based workstation. Is it a high-performance solution? No. Is it highly secure? Not out of the box (but it can be made to be.) Is it cost-effective? Absolutely! Virtually any enterprise is large enough and has enough money and expertise to support a Windows network -- even one connected to the internet. This is just not the case with UNIX.

 

Enter Linux ...

I said above that I thought that Paul was missing the point when he suggested that people stop comparing UNIX/Linux to Windows. Well I do but Paul is right on one score -- UNIX and Linux are well-suited to do the same things. Which means that they are also well-suited to do anything that a Windows environment can do. And both will do it more efficiently. So?

Ultimately, if one does not wish to compare Linux to Windows, then one is left with two small markets for Linux. The technical consumer (some might say geek) -- who downloads Linux for free, and the large enterprise who wants 24/7 support for their software investment. Two groups which are pretty much mutually exclusive.

At first glance, Linux can perform all of the functions of a Windows desktop and a UNIX server and cost the same or less than the equivalent Windows box (and a lot less than an equivalent UNIX box.) So why is it not making significant inroads onto the Windows desktop? Well, this question takes me to my question to John. Who is the customer?

Microsoft has clearly delineated two groups of customers. Consumers and the enterprise. Linux has not. How does Microsoft do it?

Consumers are sold through Microsoft's OEM's. This market is left pretty much to Dell and HP for the mass market and a lot of smaller OEM's for the specialty market. In the end, Microsoft doesn't care whether you are a stay-at-home mom or a C++ programmer. The key is that no matter what their level of expertise, or the size of their pocketbook, the consumer can buy a personal computer with Windows already installed which will do everything they can imagine. Why not a Macintosh instead? Because of the price-point. Because there are fewer points of sale. Because there are fewer available applications. Enough said about Apple.

The Enterprise, as Microsoft well knows, is made up of the very consumers who have a PC at home on their dining room table.

The small enterprise without any technical expertise can put up a robust, reasonably secure Windows network for a few hundred dollars. They can do this through their favorite OEM and Microsoft need do nothing. Why? because the small enterprise does not have the expertise to support either UNIX or Linux. (It doesn't matter if Linux is less expensive to buy if you cannot support it on an ongoing basis.)

The large enterprise is a different beast altogether -- and is asking different questions. These are the folks which Paul is really talking about in his article. They know that there are places where Windows servers are well-suited to the job and there are places where UNIX/Linux has a clear advantage. Microsoft is in a position to be very aggressive in this market because robust hardware and software is always expensive and costs are measured in TCO over an extended period of time. Up-front costs mean nothing compared to productivity. Unless the large enterprise is a start-up, they have been doing IT for years and have plenty of UNIX/Linux expertise -- and can afford to pay for it if the efficiencies of UNIX/Linux can be translated into improved productivity. Ironically, the mainstream UNIX vendors are being squeezed from both sides in this environment. By Microsoft offering proprietary functionality and low training costs and by various Linux vendors offering low up-front costs but little or not training path for non-technical staff.

So, how does Linux make inroads against Microsoft? Well, they cannot in the proprietary services arena for the same reason UNIX cannot. That leaves the desktop itself. But how? Find out what the customer wants. For the desktop, the overriding concerns are cost and ease of use. Let's look at these one at a time:

Cost. This is the easy one. If you are a robust technical user, you can get Linux free but you will spend hours setting it up and configuring it -- most likely on a machine which came with a copy of Windows included. If the machine did not come with Windows installed it was probably because the user put it together themselves -- or they paid an OEM a premium to leave Windows off the machine. Sure there are a few third-tier vendors selling pre-installed Linux desktops at Wal-Mart at entry-level prices but if one wants a tier-one hardware vendor offering robust technical support or out-of-the-ordinary peripherals they are out of luck.

Ease of use. This one is a little tougher. Everyone reading this article knows that Linux can be made as easy to use as Windows or Macintosh. The problem is that this is now a commodity marketplace and, while Linux vendors such as Linspire have been making great inroads in this area, profitability is the challenge. So is customer confidence. Linux will not make much headway in the consumer spac until a consumer can call up Dell and say, "I want Linspire on my Dimension desktop. Oh yeah, I also want all of these peripherals."

Hardware Compatibility. This is a HUGE issue for anyone wanting to put Linux on anything other than a plain vanilla personal computer -- mainly because Linux vendors can only afford to invest so much effort into testing before they have to increase the price of the OS. This problem goes away once a major Linux vendor enters into an agreement with a first-tier vendor such as Dell or HP but whether that will happen anytime soon remains to be seen.

Unlike Microsoft, which long ago established highly profitable agreements with its OEMs, Linux vendors are trying to figure out to whom they are trying to sell their products. To the large enterprise to replace aging UNIX systems or to consumers which represent very low margins but with the potential to be profitable at high volumes? Short-term profitability favors the enterprise as the target customer.

It is going to take a major Linux vendor pairing up with a major first-tier OEM and a major enterprise or government to make the inroads on the desktop which will make Microsoft finally take notice.

Topic: Operating Systems

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  • Commodity products

    Windows and Office are not commodity products just because many are sold. The one main weakness in a very good article is not recognizing that Microsoft competes with itself.

    If Microsoft did not add value, no one would have a reason to change from his older versions of Windows and Office.


    And Linux's handlers only gradually realize what has changed, thinking that applications, often available for some time, can provide similar functionality.

    Because of their view of software, Unix experts and aficionados tend to think that the modular approach is the best.
    But the integrated approach, based on buying one piece of software and watching it work smoothly and efficiently, is actually a better sales point.

    In short, like Mr. Murphy, your insight into software appears insufficiently concerned about the buyer.


    Let me repeat, though, despite some flaws (as I see them) this is a very good summary. I can tell because I mostly agree with it.
    Anton Philidor
    • I partially disagree

      "If Microsoft did not add value, no one would have a reason to change from his older versions of Windows and Office."

      There are other. One would be application support. If applications quit supporting older versions of Windows, people will need to update. The next would be OEMs no longer selling older versions. The only reason we have XP is because Dell quit selling 2000. Then there is the discontinuation of support. Not that everyone needs support for their Win98 machines, but some users would be compelled to upgrade.
      Patrick Jones
      • Applications and Windows.

        The applications run on Windows can take advantage of additional capabilities provided by a new version of Windows. In a sense, the upgrade in an application is caused by the upgrade in Windows. Symbiosis.
        (As an aside, I wish older versions of software were more available for those who do not upgrade.)

        You wrote:
        If applications quit supporting older versions of Windows, people will need to update.


        Developing new versions of Windows costs Microsoft money. If the only reason people bought a new operating system were because they were buying a new pc, Microsoft would increase profits substantially by not bothering with improvements so frequently.

        You wrote:
        The next would be OEMs no longer selling older versions.


        You do have a point about discontinuance of support.
        But would Microsoft discontinue support on their most recent operating system?
        They do have to give something back to customers. (Statement is gift. Appreciate it.)
        Anton Philidor
        • Improvements

          Do you have the numbers on how many people bought XP Upgrade? Compared to 2000 Upgrade? To be honest, I don't know of many people running XP that didn't get it with a new computer. The same goes with the new Media Edition. The few I do know where either people that have to have the latest version, or those that bootlegged it.
          Patrick Jones
          • win2k most common

            According to an article a in Computer Sweden a few months ago 48% still runs win2k. Win2k was the most commonly used OS. I can't remember the figures for XP though, but at least its safe to say that 3 years after the introduction XP less than half of all businesses have upgraded.

            Personally I didn't upgrade the desktops of my company as I didn't like the software activation of XP. It sort of put our long term access to our own data in the hands of Microsoft, and I didn't find that acceptable.

            Besides XP didn't offer anyting that would give us much return of investment so I'm not sure that we had upgraded anyway, even if we had trusted Microsoft with our data, and from what I have heard so far about Vista, the same will apply to that once it becomes available.

            Today, the only reason to upgrade to a new version is because your current one is end of lifed by Microsoft.
            uno9
          • Not much change from W2K to XP

            So advice not to bother upgrading was frequent.

            That's why the security scare was so important. Security became a feature on XP but not W2K. Microsoft was lucky that the issue became important.
            (The company would have been in trouble if the response had been perceived as inadequate, but Microsoft had the resources available. Bill Gates doesn't mind signing paychecks.)

            Remember that W2K was for professional and not home users. XP finally killed off the W95 kernel, and not soon enough.

            W2K remains popular in businesses because the interface was so coarse, I'm convinced. The loyalty is attitudinal.
            Shows hiow little security matters, in truth. If it did, there would have been even more XP upgrades.
            Anton Philidor
    • Microsoft added value...

      The real and important reason users upgrade their Windows and Office products is not the "added value" found in enhanced productivity. These upgrades are purchased and painfully applied to get a critical feature that is inherently missing in MS products: security and invulnerability. If it wasn't for these, I would still be using Windows 98 and Office 97. So I guess it is true that MS competes with itself in this regard and they have been wise to screw their customers with insecure software and always touting the next upgrade as the panacea that will make it all better.

      I basically don't understand the statement regarding Linux "competition" with MS. Linux is an ensemble of code that has no economic incentive. To state that Linux "competes" with MS is akin to stating that the beaches in Florida (that I live very near to) are competing with the Mouse House at Disney World or the Universal Studios park. That is simply not the case. The beach could "care" less, if you are willing to go to that level of anthropomorphism, about competition. Now the business that have set up an economic concern by being associated or proximal to the beach do compete with the Mouse. Still, a majoprity of people prefer the beach (especially the open and uncommecialized beaches such as the Canaveral Seashore) because they seek to escape the rigid control and constant expense in the managed theme parks (just about everything at the Mouse House costs much more than it should as there is no competition when your on Disney property; also the peace officers and every other service is also owned and controlled by Disney). They prefer the wide open, unrestricted horizons that you can only get in the public domain. This may be some of the draw that Linux represents: not controlled, scripted or sold in little increments with rigid restrictions and oversight. However, there will always be a line of those that go to Disney in order to pay an awful lot of good money to stand around and watch mechanical birds in concrete trees as they are afraid of taking the responsibility of their own enjoyment into their own hands. But the majority of people at the seashore didn't consider any competition or even consider the Disney "experience" as they knew it is not what they needed or wanted. Some of the others at the seashore are there because the local merchants used the beach to compete with Disney. It's those merchants for Linux, and not "Linux" that are competing with MS. Maybe we can try to use their names in the future, Names like RedHat, IBM and the like.
      jacarter3
      • Another satisfied customer.

        With Longhorn so long delayed, Microsoft must have been wondering how they could get people to upgrade to XP. Finally, Bill Gates received a great gift, the discovery of a real value added feature, one customers were clamoring for. Increased security.

        You wrote:
        These upgrades are purchased and painfully applied to get a critical feature that is inherently missing in MS products: security and invulnerability.

        Important to remember that even such a lucrative feature as security eventually becomes less exciting. Staff at companies, possibly including IT, will think of the security problem as much improved, maybe even effectively eliminated.
        But if you can complain effectively about security vulnerabilities, you can contribute to the quick uptake of Vista. Just be strategic about when you complain. (;-))


        On your other point, IBM and other companies make substantial contributions to direction and development of code. Linux is part of their commercial strategies. And beyond those companies, others are using Linux in some distribution as part of their attempt to make a profit.

        Linux does have an ecosystem of its own.
        But it's not like the Windows system, in which operating system and application developers cooperate to increase profits.
        The Linux ecosystem consists of surreptitious attempts to guide the software's course in such a way that companies surviving atop it can eke out a hardscrabble subsistence despite the antagonism to straightforward profit hard wired into Linux's DNA.

        I like your description of those beaches open to the enjoyment of all. Sound like great places to vacation from all thoughts of software.
        Anton Philidor
        • Yes

          they are. For me it's only a 2 minute walk from my pool. This makes it real hard to decide to spend money on a restive getaway...
          jacarter3
      • How many people are drawn to Disney every year?

        Seems to me a large number of people like it better than an empty beach.
        No_Ax_to_Grind
        • I wouldn't say better

          This year we went to the beach and are going to Disney in November. They are just different types of vacations. Which do I like better? I don't know since this will be the first trip to Disney with my children.
          Patrick Jones
          • Kids

            The only real reason any sane adult would ever suffer the Mouse House in November. Hope you have a good time. Remember that when they say "It's not a zoo" they really mean it. Finding any aniamls in Animal Kingdom requires patience and due dillegence. Try the safari truck tour first, then leave for Epcot. One can take only so many concrete trees and animatronic hippos before you gotta have a beer.
            jacarter3
          • Do they search you at the entrance?

            I may just have to pull out the ol' flask :)
            Patrick Jones
        • Empty beach

          Yeah, I wish. Fortunately I can walk from my home because parking at Paradise beach is a real beach. There is one heck of a lot more people on the beaches of Florida today than will be found at all the theme parks in the same combined. I'll bet there are more at the beach in the Space Coast than at the Mouse trap. Thanks for asking.
          jacarter3
  • Other flaws IMO

    First, Microsoft Office (and Windows) outcompeted earlier alternatives. Microsoft's success against opposition has been continuing. This shows a successful competitive strategy, even against first-to-market companies.

    You wrote:
    Before the IBM PC, most of the things MS Office does today were done on a typewriter or with a pencil and ledger sheets, and the results were presented with hand-drawn artwork published by a professional typesetter.


    Second, both Merrs Carroll and Murphy were examining Windows and Linux. That Linux is successful at replacing Unix is highly significant, but not a directly relevant factor for their topic.

    You wrote:
    Both Paul and John seem to think that Linux has been a failure because it hasn't made serious inroads into the Microsoft desktop juggernaut. However, I am sure that Sun, IBM, and others would disagree regarding the relative success of Linux in the marketplace.

    Worth noting that a main part of the reason for the attention to Linux is its endorsement by IBM et al as an Unix replacement. That's its purpose.


    Third, it's not a coincidence that people with long university training tend to believe Microsoft products are inferior to Unix as software. That's what they have been taught, in many cases.
    Have you seen the discussions here in which people assert that Windows is damaged by adding code which is not part of an operating system?
    (Not a flaw, but an observation.)

    You wrote:
    While UNIX was doing what it does best throughout the last 35+ years, it continued to be geared to the needs of the network and the needs of technical people whose job it is to get the most out of expensive hardware and bandwidth ? and doing so with costly technical expertise available only from the nation's universities offering programs in computer science. In truth, other than universities, no one in the enterprise cared very much about UNIX until they needed to figure out how to use leverage the Internet to their advantage.

    Also worth noting that computing was significant to enterprises long before the internet.


    Fourth, yes, Linux becomes popular in Unix shops because the skills are readily transferrable. But I think you should note that once an Unix shop has standardized on Linux, high level skills, especially Unix skills, are at less of a premium.
    Maybe by attrition, but maybe by service contract with say IBM, the employer can introduce less expensive people who know Linux but not the fine points of Unix.

    You wrote:
    Unless the large enterprise is a start-up, they have been doing IT for years and have plenty of UNIX/Linux expertise ? and can afford to pay for it if the efficiencies of UNIX/Linux can be translated into improved productivity.

    With Linux, the hardware is cheaper. The software is cheaper. The skill set needed is often less elaborate. That's not productivity in the sense of increased output necessarily. That's just cheaper.


    Fifth and finally, the operating system market is not a commodity market. The pc and software market is a commodity market, prinmarily because everyone is selling almost entirely pc's with Windows. This is an important distinction.

    You wrote:
    Everyone reading this article knows that Linux can be made as easy to use as Windows or Macintosh. The problem is that this is now a commodity marketplace and, while Linux vendors such as Linspire have been making great inroads in this area, profitability is the challenge. So is customer confidence. Linux will not make much headway in the consumer spac until a consumer can call up Dell and say, "I want Linspire on my Dimension desktop. Oh yeah, I also want all of these peripherals."

    Linux is not a commodity choice. And software profitability would not be a substantial problem if the volume were there. Making only a small amount on each copy sold can produce large profits when many copies are purchased.
    Microsoft well understands the significance of high volume sales. So would Linux vendors, if they ever had a chance.
    Anton Philidor
    • Not so fast

      [b]Worth noting that a main part of the reason for the attention to Linux is its endorsement by IBM et al as an Unix replacement. That's its purpose.
      [/b]

      Linux doesn't have a "purpose" it just is. And it can be shaped to whatever use the end user requires. The true strength of Linux, and why I believe its eventual market dominance is no longer in doubt, is the ability to shape it to fit very specific requirements in a variety of applications. Windows simply can't change that fast or ever become that user specific. Windows has a push button mentality that permeates everything it does.

      [b]Third, it's not a coincidence that people with long university training tend to believe Microsoft products are inferior to Unix as software. That's what they have been taught, in many cases.[/b]

      Well, they're taught that for a reason and that reason is because it's true, though it depends on the technology application. Again it's the specificity that Linux allows that is its greatest strength.

      [b]Linux is not a commodity choice.[/b]

      And three years ago we weren't even having discussions like this one. Turn key systems that allow the OS and applications to be pushed out to the user and managed centrally are maturing at a very rapid pace. Linux by nature IS a commodity and that will translate into marketshare which will exert pricing pressure back on MSFT. At that point MSFT will have to return to what they've so long avoided: Earning a living instead of wallowing in 85% profit margin trough.

      Don't mistake institutional intertia for superiority.
      Chad_z
      • The most common use of something...

        ... may be considered its purpose.

        Linux is most often installed on servers, replacing Unix, I think you'll agree. So in my terms that becomes its purpose.
        The desktop is a side issue, perhaps more propaganda for supporters than realistic campaign.


        Yes, there are also those who use Linux and, more appropriately, open source in general because they can adapt it to specific circumstances.

        That's worthwhile. I'll point out the availability of good tools for similar purposes in Microsoft and other products.

        The vulnerability here is, the employer has to be willing to pay for services as compex as adapting or adding code rather than using tools, which is a somewhat simpler (and perhaps less versatile) skill.

        Unfortunately, if employers consider IT a cost center, they may be willing to accept a less than optimal but substantially cheaper (in personnel costs) solution.
        That's the significance of Mr. Wagner's point about a pre-existing, expert staff. So long as companies are willing to maintain said staff, this remains a possiblity.


        I'll just note that your Universities teach the superiority of Unix because it's true contention may show substantial good training. At universities.


        And finally, the true turnkey solutions come from Microsoft. Turnkey means everything arrives together with perfect integration. Not many open source supporters believe that the disparate software can be connected quite so seamlessly.

        Microasoft has to fight commoditization, and I'd say that proving superiority to its own prior versions is a greater challenge than any open source product.
        Whichever the cause, though, the effect is the same.
        Anton Philidor
  • Markets are Key

    On the whole I thought the analysis here is pretty good.

    It is pretty clear that Microsoft and Unix are the main Linux competitors - and that they serve different needs, different markets.

    There are two themes that the Linux World needs to develop from this starting point,

    1.
    Microsoft (and others, see the recent Oracle acquisitions) are putting together additional layers of function on top of the OpSys, and the economic payoff is ease of integration (indeed this is now so obvious that Larry Ellison actually said that about Oracle's purchase of Siebel).

    This is the Unix/Enterprise market.

    2.
    'Desktop'/Handheld Users. If Linux doesn't enter the ease-of-use market they are missing out on the other half of the economically attractive ease-pf integration story.

    There is, by the way, a central group of key users. Microsoft (because they started with IBM as a partner) sold lots of Windows to lots of big enterprises. Make no mistake, a lot of PCs out there started life as corporate machines - or are purchased today for employee home/office use.

    If Linux does not copy this tactic they will miss the economies of scale that made Windows a 'standard'. They will miss the current opportunity to pull the ICT World into a new a far freer environment where Linux is a core standard at the heart of a user-defined environment
    Stephen Wheeler
  • The un-tapped market.

    I think where many (most) miss the target is that only 50% or so of US homes even own a PC. Believe it or not there are a lot of folks that never need a word processor or spread sheet.

    Why is that important? Consider what you said about how the PC changed the paradigm of what a "computer" is and what it can do. A "computer" that can do things people want and need in the home could grab a huge portion of the untapped market out there. Unfortuantely all the vendors (Linux and encumbered source included) can't seem to look beyond what the paradigm they see in front of them...

    Need a simple example? Look at what Apple did with the Ipod...
    No_Ax_to_Grind
    • They tried to tap it...

      That was the whole point of Lindows on Wal-Mart PCs. The problem is, most of the 50% that don't have a computer either absolutely have no need for one, or can't even afford the cheapest ones.
      Patrick Jones