Linux profits won't be easy...

If you're thinking Linux, remember this: Profits will come from service and support. Full stop.
Written by Ben Elgin, Contributor

The message from open source land is coming in loud and clear: The only way to turn profits with Linux is to offer services and support around the dirt cheap operating system.

Wall Street high-flyers Red Hat Software and VA Linux are essentially using software and hardware, respectively, to prime the pump for higher margin Linux services gigs. Meanwhile, giants like Hewlett-Packard and IBM also are staffing up their Linux consulting practises.

But is there enough room for the small or mid-size integrator to thrive? So far, the market is still too nascent for any channel player to pay its bills with Linux alone. Even LinuxCare, the Linux consulting shop, has softened its tune, by saying it is supporting non-Linux environments like Windows or Unix. "We're seeing a lot more interest in Linux, but it's still in its infancy. Less than a third of our business is through Linux," said Scott Holcomb, president of Southern California integrator Holcomb Enterprises.

However, most small channel players say they haven't bumped into the likes of Red Hat or IBM when pushing their Linux expertise. "Most of my work is [derived] through local networking and referrals," said Paul Bingman, boss of integrator Edgewood.Net.

Red Hat concurs, saying it plans to foster collegial relations between its professional services arm and its army of resellers. "Our efforts to serve the small- and medium-enterprise customer segment well -- and to penetrate it deeply -- very much depend on VARs and integrators," said Red Hat's director of sales and marketing, Teresa Spangler.

No matter who lands the business, the demand for experienced Linux gurus is steep. According to an informal ZD US salary survey, Linux programmers pull in comparable wages to their Windows and Unix brethren. A Linux whiz with one year of experience earns approximately $50,000 (£30,100), depending on region. The rare bird with more than three years of dedicated Linux experience can snag upward of $90,000 (£55,800). But, because the grassroots operating system is fairly new to the limelight, only a small number of propellerheads have live Linux deployments under their belts. Prospective employers that demand too much experience are tying their own hands, say headhunters.

"There's a lot of demand for Linux in the government sector, but their demands are ridiculous," said Eric Schuller, president of recruitment firm TE. "They want people with graduate degrees and five to six years' Linux experience. That just doesn't exist."

Unless, of course, that offer letter goes to a certain Transmeta techie.

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