Searching for a Linux supermodel
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As personnel shrinkages go, Did Wiegand really say that? Could the leader of such a major Linuxcompany -- the largest distribution in Germany and maybe Europe -- havesoured on Linux so profoundly? Apparently not. The One would think the case would have been closed at that point -- but itwasn't. Reaction to Weigand's perceived comments took on a life of their ownlongafter the retractions kicked in. All over the place, people used theopportunity to vent on the perceived futility of the current crop ofLinux-related business models. Attacks, defenses, and counter-attackswerethe order of the day; the mentions at This issue has certainly touched a nerve, and I can see why. Linuxpartisans are insistent that the success of Linux as a means ofcreatingtechnology (let alone the technology itself) should not bemeasured by the fortunes of the various companies that exist to peddleit.Old school observers and critics such as Microsoft (see In some senses, both sides are right. The Linux industry, as most people know it, has yet to really prove itcanmake a buck. Let's face it -- there's not a whole lot of money to bemadeselling boxes of Linux on store shelves for $30 or so. You have to addvalue to the boxes so they don't look like rip-offs next to the freeLinuxdownloads, but more often than not the added value is little more thancommercial documentation. In this sense, then, the retail-box vendorsarelittle more than glorified book publishers, which explains why The current darling of Linux revenue models is the one that ignoresmakingmoney off the software itself and concentrates on support, consulting,andtraining. Companies such as Linuxcare and Linuxgruven exist for nootherpurpose, and every single Linux distribution vendor plays in thisspace.But I wonder whether this model is enough to sustain the growth neededto compete toe-to-toe with the big guys. Companies such as Microsoft and Sun, who make money from hardware andsoftware sales, offload most of these tasks to local VARs, who in turnhave direct contact with end-users (except for the very largestusers, which the big vendors handle directly). If the big Linux playerswant to be deeply involved in consulting,training, and support, they either need to partner with local VARs orcompete directly with them. Competing with the VARs, which have more intimate knowledge ofend-userson a day-to-day basis, is difficult if not suicidal. Linuxdistributions,nice as they are, comprise only one part of the overall computersolution,and no current Linux distribution is equipped to take on all facets.Thosecompanies that reach out to partners stand a better chance of success,even if their share of the revenue won't be as high as they'd like. Companies such as Caldera, with its longtime cultivation of a VARnetwork,and Linuxcare, which franchised out its education program, arewell-positioned to attack this market. As for Red Hat, theirmembership-based VAR revenue model is a little different; but at thisstage of Linux's maturity, how many resellers can afford the Linux companies are still scrambling for the right revenue model,knowingthat it's a necessity in order to provide the long-term stabilityneededto comfort would-be end users and dull the anti-Linux hype. A number ofnovel approaches have evolved, and I'll talk about those next week.Untilthen, if you have any ideas about novel Linux revenue models, I'd lovetohear them. Tell me in the TalkBack below or in the ZDNetLinux Forum. Or write me directly at evan@starnix.com.
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