The Emerging Dell-Linux-Apple War: Page 3

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Linux Problems

Linux isn’t really ready for the desktop. It isn’t better than Windows it is simply different, and seems to morph between limited easy-to-use client and non-compatible headache in large numbers. While it is improving it doesn’t yet interoperate as well as the MacOS does in Windows desktop environments.

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This isn’t initially a huge problem since its first success is probably going to be in mixed Linux/UNIX/Windows shops where Windows is only on the desktop. But, these mixed shops are probably owned largely by IBM and HP right now and these competing vendors are probably not going to give them up easily – suggesting this opportunity won’t last long for Dell.

In addition, the Linux revenue model is upside down from what Dell needs. They are being hit on revenue and margin. Linux is perceived as having less relative value than Windows (folks won’t pay as much for it and many think Linux should be free) and disproportionately to its actual cost. In short, people expect a bigger discount for Linux than Dell actually saves by using Linux.

If they could sell it for the same price as Windows, or ideally more, the financial incentives to do Linux would be strong. For now the opposite is true and if they cannibalize Windows sales with Linux they will hurt both revenue and margins. And even if they expand their market they will probably erode margins, making things worse.

Linux needs to be seen as on par with Windows, from a price/value perspective, and the marketing and positioning to make that happen is currently beyond any Linux vendor. And while Dell could make this up, the margins are currently too tight to provide the level of marketing cash needed to make this work.

Finally, the Free Software Foundation appears to be doing its level best to make Linux appear anti-business. Fortunately they are being fought by both the primary vendors selling Linux and Linus Torvalds himself.

This all makes it very difficult for Dell to scale the offering. And, just as if they succeeded they would drive other OEMs to Linux, if they fail they will probably set Linux back years with regard to desktop deployments. Dell is still a major bellwether and whatever happens, the result will be significant.

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