Last week I focused on Windows Vista and how things didn’t look particularly good for that product, at least not right now. I also mentioned that neither Apple nor Linux was likely to be able to take advantage of a Microsoft stumble.
However, I didn’t explain why, in addition, I was focused on the developed world and I have been reminded that in places like India where different rules apply, Linux is already a viable competitor. As a result, this week, I’ll complete the parts I left out in last week’s column.
Apple Against Vista
Recently I had lunch with an old friend who had been a client while I was with Giga (now a part of Forrester). He worked for a large multi-national firm and remains a huge Apple fan. As a senior IT manager and because his firm, like many others, was upset with Microsoft, he was able to set up a meeting with Apple’s executives to talk about a migration.
His firm was skeptical but relatively open-minded. They started off making the same request of Apple they make of companies like Dell and Microsoft. They wanted a two-year hardware/software roadmap and assurances they could buy a platform that would remain stable for at least 12, and hopefully 18, months.
In addition, they wanted early warning on all patches and changes to any of the platforms they were buying and solid assurances on price. They had issues with the fact they would have to single-source their hardware vendor but felt if Apple could meet their other requests they were willing to continue the discussion. (As is the case with any vendor, Microsoft has its share of very unhappy customers.)
The Apple executives, smiling, said “We’re Apple and we don’t do that.” The meeting ended relatively quickly and my friend has since moved on to another, much smaller company, where he began the same process. Here the issue was compatibility with existing applications — and the firm just wasn’t willing to take the risk of buying a platform that couldn’t run what they needed to run native or tying their future to one, single-sourced, hardware company.
Plotting a Roadmap
It doesn’t matter what Apple does to the product. Until the company can address the need for a multi-year roadmap that businesses can refer to, get a stable platform that will be deployable over a long period of time, and designate multiple hardware vendors clients can bid against one another to ensure the lowest price (as well as to avoid getting nailed by internal audit), enterprises simply won’t buy Apple broadly.
One other thing: Several folks questioned my comment that Apple demand was dropping like a rock and referred to past sales performance to refute this. Demand is measured by surveys of buying intent and I rely on surveys done for the financial firms who follow Apple. Unfortunately I don’t have the rights to share the results. But the financial reports you have seen are based on sales before Apple announced the Intel move — and the impact of that development won’t show up in the financial reports until after this quarter ends.
If the studies are to be believed, the fourth quarter, in particular, should be ugly for Apple. Granted, forward-looking studies are often unreliable, but the study I’m now using did accurately predict that last quarter would be very strong.
Linux in the Third World
I just spent several days with a broad cross-section of the major industry research firms. Gartner was outspoken on the fact that the Windows Starter Edition was a non-starter because it wasn’t in English (the preferred common language), it didn’t have the upgrade path critical for a crippled product, and, as a result, virtually none of the markets, except one, had bought any significant volumes.
Sixty-five percent of the 100,000 sold went to Brazil, which suggested something unique happened there that probably had little to do with the offering. Of course, 100,000 in a market the size we are talking about might as well be zero, and the Gartner analyst felt Microsoft was in some kind of weird denial.
What is interesting is that the kind of PC that continues to move in this market either has DOS loaded on it when sold (and then gets pirated Windows in the field), or it gets Linux. While I was in China, Lenovo said that 90 percent of its PCs went out with DOS. Granted this means they aren’t running Linux, but Microsoft isn’t making any money either because the DOS used doesn’t come from them and they don’t get a cent from pirated Windows.
In India, however, Linux is getting a big push. Representative of this is the new system recently launched by HCL Infosystems. With a VIA 1 GHz processor, 128 MB RAM, 40 GB drive, 15-inch digital color monitor, 52X CD drive, keyboard and a mouse, the thing costs about US$220. And it runs Linux.
Interestingly enough, because of power problems there, the machine is equipped to run off a car battery for up to 8 hours (I imagine that after 8 hours you will have to push start the car). Sure makes the Mac Mini look expensive doesn’t it? If you recall that $100 represents more than a month’s salary in India, for most of these folks you’ll understand why $220 is towards the high end of what they can afford.
While attending Computex in Taiwan a few months ago, I had a chance to listen to a government official talk about rolling out products in India and also comments from a business executive from one of India’s airlines. Both were touting Linux. From the government side they felt they needed to support the massive number of dialects that they had in the country and only through a combination of open source and Linux could they afford to get there.
On the business side the executive not only preferred Linux for data entry (they used Windows for some of the staff) but a thin-client deployment. It’s interesting to note that most thin clients seem to be based on VIA technology now. One of the big reasons for thin clients, other than cost, was hardware theft. With thin clients, the government found that when one was stolen, the thief, after discovering he/she couldn’t actually use the device, often returned it.
The main reasons Linux isn’t moving well on the desktop in the developed world, except for in Germany, are that there is a lack of OEM support and lack of a common Linux distribution they can depend on. There is also a very stiff migration cost.
That doesn’t seem to be much of a problem in the developing world, particularly in India where labor is very inexpensive and they need a massive amount of product variance because of huge language diversity. Much as it was about a decade ago when a large portion of the market bypassed UNIX and went to Windows, we may be seeing the next bypass, this time with Linux reigning as favored OS in places like India. Of course, once it demonstrates success in one area, it can’t help but become more attractive in others.
Thin clients are back with companies like Clear Cube, Wyse, and HP picking up steam. As mentioned above, particularly in areas where there is high theft, they are gaining in popularity. We will cover this in depth as part of a future piece on emerging hardware platforms, but I’ve been running a thin client myself recently and it is a great way to provide a relatively secure PC to a small child. It is also not particularly expensive, priced at about $190 at Tiger Direct, though you’ll still need a monitor, keyboard and mouse.
You load the included software on another networked PC (wired for now) and you get what amounts to a single button appliance PC in another room. One PC can support up to three of these things and they are great for most school work and Web browsing but not games — which may be a good thing.
In the end, Apple’s ability to advance in this market remains up to Apple, as has always been the case. The company’s initial decision not to license its OS to Microsoft and Microsoft’s decision to license its OS to IBM currently defines the desktop market — even though both decisions were made in the ’80s. Apple has to either be responsive to the business buyer or remain a niche player which, though safer, bars them from any potential opportunity that would result from a Microsoft stumble.
Germany aside, Linux isn’t moving on the desktop in the developed countries but is moving in the developing countries primarily because Microsoft has not stepped up to meet needs there. Strangely enough, it kind of looks like Apple and Microsoft are making similar mistakes, which is reducing both of their opportunities — kind of ironic if you think about it. Sometimes the most painful mistakes are the ones you make over and over and over again.
Rob Enderle, a TechNewsWorld columnist, is the Principal Analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.