ZaReason's Linux Netbook Strategy

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Cathy and Earl Malmrose founded ZaReason several years ago. ZaReason is a Linux OEM that has long intrigued me for a number of reasons: they encourage customers to open their boxes and tinker, they specialize in OEM Linux boxes, and they demonstrate that there is still room for independent shops in the rough-and-tumble world of computer retailing. In many ways the independents out-perform the big businesses as they understand Linux and Linux users, and a Linux-only shop doesn't have to contend with the pressures and restrictions that Microsoft puts on its partners.

Netbooks have been a bright spot in a rather dismal retail landscape, despite most of the bigtime vendors not "getting it" and releasing oddly-botched strangely-customized Linux installations on their netbooks. ZaReason just released their new netbook, the Terra A20. The Terra A20 packs a lot of goodies into a small box. Cathy Malmrose kindly answered my questions about netbooks and the Linux retail business, and shares some valuable insights into surviving in a tough business.

Q: The idea that a netbook should be little more than a limited-purpose dumb terminal to connect to Web apps is still floating around. What's your take on this, is there a market for something like this? Or do your customers want an inexpensive, small notebook that does everything an ordinary notebook does, only smaller?

A: From what I can tell, the crowd is splitting -- some want the strongest little powerhouse they can get; some want an elegant cloud notebook. There is a lot of work being done for both the muscle machines and the cloud machines and we are paying attention to both, hoping to supply both. We already have an Ubuntu netbook with quite a bit of muscle. When someone orders a 500 gig drive, you know it's not just a cloud machine. For the cloud, I'm headed off to Paris tomorrow morning to talk with the JoliCloud developers. JoliCloud appears to have the most promise at this point.

Q: Is there a lot of demand for netbooks? How does demand for a netbook compare to your other products?

A: Our little Terra netbook is currently our bestseller. I think it's the style, the breadth of options, and the increased computing power that is turning people's heads. Not being limited by Windows licensing demands, we can offer a variety of options you don't see on other netbooks. The Ubuntu-colored case has been far more popular than we predicted. And that's just cool.

A: Do people appreciate the nice Ubuntu or Tux logo in place of the Windows logo? (I think it's cool!)

A: Yes, the Ubuntu and Tux logos are those final touches that make the difference. A lot of netbooks are running non-Ubuntu Linux, so we've added the option to the Terra for Choose-Your-Own super-key logo (Ubuntu or Tux).

Q: The barriers to entry in Free software are low--- mainly time and effort, and collaboration and distribution are cheap and easy. But hardware is a more difficult and expensive problem. As users we're always dealing with the problem of closed hardware and favoritism to Microsoft. Obviously it's beyond the reach of most folks to set up their own manufacturing. What are some good ways to deal with this? Is it practical for a small-timer to deal with manufacturers directly and to set up shop like ZaReason? Does the budding Free software/Free hardware mogul have to go to Taiwan?

A: The barriers are still there unfortunately. Anybody can still build their own machines using NewEgg or other component suppliers, but to get the edge on the market, you need to work with the Tier 1 suppliers. It's standard business -- bulk matters. That said, bulk can also weigh a company down in a market where components are improving faster than they can be shipped to their end destination. It is excruciatingly important to have a limber company. We chose to structure ours as a set of smaller shops (more offices coming soon to a university town near you) rather than the typical large spreading campus (and large overhead). We may be wrong; we may be right, we'll see. For now, we know that we love hearing back from customers that they love their new laptop / desktop /server. The "love letters" make it so enjoyable.

Article courtesy of Linux Planet.

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