I was following links when I came across this article, “Dell and Desktop Linux: Can it Work?“, written before Dell came out with Ubuntu. It shows how wrong our conclusions can be based on fuzzy or incomplete information.
Why it Won’t Work
Operating System Two words for the 67,000+ that voted on IdeaStorm for pre-installed Ubuntu, Fedora, or OpenSUSE and the 23,000+ that wanted a no-OS installation option: dream on.
The margins in the PC business are traditionally very tight. As an illustration, analysts have inferred from HP’s last quarterly financials that the company had captured still more of Dell’s marketshare. What led them to draw that conclusion? HP’s earnings went down. Read that again: HP’s share of the PC market increased but their earnings went down because of low PC margins.
With that reality of the market, you can’t expect Dell to further reduce their margins on PC’s by eliminating all of the software they traditionally include and make money on. And besides, Dell isn’t losing marketshare to some no-name whitebox vendor, they’re losing it to HP who offer the dazzling array of Windows Vista Home Basic, Windows Vista Home Premium, Windows Vista Business as OS options.
Support No support infrastructure for desktop Linux is in place. Dell probably isn’t interested in another line of revenue being eliminated.
Hardware Hardware support could be an issue and might limit the number of models that Dell could offer Linux on. Do all of Dell’s consumer products work with Linux? Does Dell want to process a ton of printer returns because of compatibility issues?
Verdict: Best to leave desktop Linux alone.
OK, where did the author go wrong?
- He did not see the rise of the tiny/low-end notebooks/desktops/thin-client-like/low-powered thingies.
- He was thinking of Dell’s old customers, not new ones who care little for maintenance contracts or getting the latest hair-drying hardware choked with RAM and big drives.
- He did not realize Vista would flop because it loaded even the latest machines with unnecessary tasks and so would not be adopted by business, compounding problems with the death/murder/suicide of XP.
- The sluggishness of US IT markets was not taken into consideration.
Moore’s Law has made a lot of the real-estate on a motherboard wasted space. Who uses 5 PCI slots? Who needs four slots for RAM and 12 drives? The power user or server. The ordinary Joe can run just fine all he needs to do in 512 MB, a flashdrive and a P3-ish CPU. When OEMs realized that the customer needed such products, they pulled out the stops and delivered:
- Intel and AMD and VIA made chips that run well fanless
motherboards with a minimum of real-estate had been out for a while but mostly for thin clients/mobile systems. The low-end works everywhere.
- ASUS wanted more share of notebooks which were hot in 2007 and made a bold move with the eee PC. Women, children, geeks, ultra-mobile folks loved them instantly. The low price of these things made the price of that other OS stick out.
- ASUS had to redouble production and stressed the supply chain. How long was that situation going to be a bottleneck?
- Millions of non-geeks have now seen GNU/Linux in action and like the performance vs price. It works
- Thin clients which work really well with GNU/Linux and use similar hardware continue to grow rapidly. The new low-end things can serve as portable thin clients.
There are over 6000 million people on the planet. TFA may have been right on for most of 1000 million. The others can now or will soon be able to afford to buy IT at these prices. Dell and the other big OEMs would have been foolish to assume the emerging markets wanted or could afford quad-core 2 gB systems. The author could be forgiven, though. Lots of people who are very vocal on the web live in the world of which he wrote. I, on the other hand, have been writing about shoe-string IT budgets and thin clients in schools for years. In my reality, that other OS has no place and Dell was not serving our needs very well. Last year, I built a system of 153 seats. Dell would have wanted me to order systems five at a time… using a credit card when it would have been much simpler to order what I needed all at once using a purchase order. Also, Dell has given lip-service to GNU/Linux by not advertising it, and hiding it on the website. Also, Dell seems afraid of the term “thin client”. Lo, many in the IT world put down thin clients when in the emerging markets they are nearly perfect tools for a low-maintenance, high-reliability, low-cost system.
Google, with “thin client” site:dell.com finds 16500 hits. Dell’s own search finds 936 including 113 “products” like thin and light notebooks running Vista… Dell’s own search finds only a few products actually called thin clients. A few others are “network computers”. None are below $300 and many bear Wyse name brand. In the real world, millions of thin clients in the sub-$200 range are being sold each year. No one in their right mind would think to run that other OS on them. The licence fee and performance would both be negative hits, just as they are for the new tiny machines.
It is a great time to be involved in IT. A lot of long-held beliefs are being shown to be FUD going down the drain. That old world of IT is growing at a few % per annum while the new world grows at 15-50% depending on the product and location. M$ can no longer sell as it did for a decade as a default hidden on retail shelves because it is just too expensive on the low-end stuff. People who use GNU/Linux a few years on the low-end stuff will know it works when they are ready to buy high-end stuff and the game will be over. Dell and the others cannot ignore that if any of them supplies the new markets because the old way of doing things will cost market share, huge market share. Competition, not the courts have finally fixed M$.