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Category: resellers

October 5th, 2009

Open Solutions Alliance acquired by Europeans

Posted by Dana Blankenhorn @ 6:08 am

Categories: General, business models, management, middleware, resellers

Tags: Alliance, OW2, OSA, Open Source, Dana Blankenhorn

OW2, a European consortium dedicated to creating open source middleware, has acquired the Open Solutions Alliance, a two-year group dedicated to building reseller channels for open source.

The press release on the deal talked about synergies and about the two organizations being like puzzle pieces meant to fit together.

I don’t buy it.

I was initially intrigued by the OSA. They had a series of meetings that hoped to develop a channel for business-oriented open source projects.

In this way they hoped to recreate the same structure that proprietary companies have. Proprietary channel vendors can be very powerful. Comdex stood for Computer Dealers Expo — it was a channel show.

But that’s not how open source works. Most open source channel companies are highly vertical. They specialize in an application set (like retail) and are using open source solely to improve their bottom lines. Their main interest is in keeping control of the customer.

This may be why the OSA seemed like such a great idea. That pure drive for sales and profit can appear strange at an open source conference, where other motives must also be given lip service.

Unfortunately the OSA never got much further than its little hotel-room conferences. Its funding came from open source companies like BlackDuck that were looking to build sales channels, and not from the channel iteself.

OW2, by contrast, has gotten some traction pushing open source middleware. Middleware is a sweet spot for resellers. The projects are often small, they’re run in a businesslike manner, and it’s a good place for them to put the “secret sauce” that brings in the customers.

OSA gives OW2 a bigger U.S. presence, along with another niche it can exploit. Just as important, I think, is that OW2 gives OSA an exit strategy.

I hope the people behind OSA won’t find this post to be a criticism. I believe the idea of the group was laudable, and that the deal with OW2 is a good one.

August 4th, 2009

Funambol to monetize cloud sync for mobile VOIP

Posted by Dana Blankenhorn @ 5:05 am

Categories: General, Internet, Software as a Service, business models, marketing, mobile, resellers, wireless

Tags: Software, Phone, Mobile, Money, Funambol, Telephony, Internet, Software As A Service (SaaS), VOIP, Tools & Techniques

How’s that for a headline, if you just came here from Google News? Let’s break it down:

  • Funambol is an open source software company. They specialize in software for synchronizing mobile devices, and claim they serve over 2 billion of them.
  • Monetize is a verb form of making money. But it doesn’t just mean making money for yourself. In technology it often refers to turning on some invention so it can make money for lots of people.
  • Cloud. A cloud is a big hosting center. Your stuff no longer runs on a particular computer using a specific operating system. It’s just in the system somewhere. It’s in the cloud.
  • Sync is short for synchronize. Synchronizing, in this case, means making two things the same. The file here is the same as the file there, and they’re kept the same even after one side changes.
  • Mobile is what Europeans call cell phones or cell-like devices. Funambol was originally Italian, but they’re now based in Redwood City, Calif. I think there is an Olive Garden in Palo Alto.
  • VOIP is an acronym, short for Voice Over Internet Protocol. Make a phone call using your Internet connection rather than a regular phone line and you’re making a VOIP call.

Now, dear visitor, what does this mean to you?

Let’s say you’re traveling to Toronto or Taiwan. To avoid your carrier’s hefty “gotcha” fees, you call home using a local number and an Internet connection through a service like PennyTalk. You’re doing big business so you collect a lot of business cards, and put those contacts into your phone.

With Funambol software, you can now synchronize those contacts with a big system somewhere on the Internet, and share that synchronized file with co-workers, who may start calling those contacts before they even get home, before they have had time to deal with your competitor.

Or, when you’re visiting grandma in India, you can take some pictures of her and share them immediately with the whole family back in Duluth, Georgia.

This is a valuable capability. Funambol hopes enough money is made from all this that its software can earn a chunk as well. You may never know Funambol is involved in this, or (if you use their myFunambol portal) you may indeed know their name.

It’s a business model, and if you want another acronym it’s SaaS, which stands for Software as a Service. You don’t pay for the software, but what the software does.

By saving you money and making profitable new services possible, companies like Funambol keep their open source projects alive. You may not pay for that open source package directly, but you do pay for it, and they make money on it.

And that’s what makes the world go around.

June 22nd, 2009

Channel ambition is not a conspiracy

Posted by Dana Blankenhorn @ 6:21 am

Categories: General, Hardware, Linux, Linux Handheld, Linux Laptop, Microsoft, business models, marketing, mass market, resellers

Tags: Computex, Dana Blankenhorn, Conspiracy, Channel Ambition, Dietrich H. Schmitz, MSI, Linux, UNIX, Operating Systems, Open Source

Dietrich H. Schmitz Dietrich T. Schmitz has posted to Groklaw a piece quoting my CompuTex coverage and claiming a dark conspiracy.

I hate to disagree, especially with someone boasting such a fine German name as Dietrich H. Schmitz Dietrich T. Schmitz(next to which Dana Blankenhorn sounds almost Irish*), but what happened at CompuTex was no conspiracy. (Note: Cut and paste, Dana. Don’t copy names from memory.)

What happened at CompuTex was channel ambition.

MSI is trying to become a brand. Microsoft’s channel support can make or break those efforts. Chairman Joseph Hsu has bet the company on a strategy of eating into HP and Dell, and Microsoft would like nothing better than to help him punish those two companies for straying from the Microsoft way.

The question is whether that is a conspiracy or sharp business elbows.

Schmitz calls it a conspiracy. Many here were enthusiastic about the possibility of the ARM chip powering Android phones and Netbooks, and saw their hopes dashed at CompuTex.

But as I noted during that show, a company gets twice as much from a PC with their brand on it as one they make for someone else. MSI needs this money to survive in a world where its Chinese partners can undercut them. The margin justifies MSI’s existence.

It is also true that Linux cannot afford a presence in the channel. It’s not how we roll. You can’t invest in retailing if your product costs nothing. There is nothing to invest. That’s why Linux and open source depend on the Internet.

A monopolistic practice occurs when two sides are offering the same deal and one side gets all the business. But in this case both sides were not offering the same deal. Microsoft offered channel support, Linux a hearty handshake and rhetoric about freedom.

There was some indication at CompuTex that Taiwanese OEMs like the rhetoric, as evidenced by the answer Li Chang gave to my own question. Given the habit of reporters there not to ask questions, and executives there not to answer them, what Mr. Li offered was a soliloquy.

But here’s the deal. There’s more to the Taiwanese market than MSI, Asus and Acer. There are literally dozens of OEMs over there looking for a taste of channel success.

What Linux needs to succeed is a way to offer more than was offered MSI.

The question is, how would you structure a deal?

* Before you send me a nastygram on the name joke, the name Blankenhorn is German, but my mom is very Irish.

June 15th, 2009

The many faces of small business and open source

Posted by Dana Blankenhorn @ 8:31 am

Categories: General, Linux, Linux Desktop OS, Linux Server OS, Software as a Service, Strategy, business models, marketing, resellers

Tags: Small Business, Small And Medium Business, Smb/Sme, Open Source, Dana Blankenhorn

One of the laziest behaviors of politicians, journalists and analysts lies in how we define a “small business”.

(Most businesses visited by Mike Rowe of “Dirty Jobs” (right) are what I call legacy businesses. For more on that read on.)

We define the term too broadly. Politicians routinely call companies with as many as 500 employees “small businesses” when tax breaks are under threat. Reporters never call them on it.

Analysts are little better. They have this catch-all called “SMB” — small to medium businesses — which can include firms with nearly 1,000 employees.

The definition lumps too many different markets into one.

It includes entrepreneurial enterprises, slow-growing legacy enterprises (often family-owned) and true small businesses, which are single-location shops with only a few employees and a closely-defined mission.

Which brings me to Matt Asay’s latest, a complaint that open source still doesn’t have the SMB market right. It’s a follow-up to a 451 Group effort from December saying open source doesn’t get much from the SMB market.

If we’re talking truly small businesses, this is an immense opportunity for Value-Added Resellers (VARs), as I wrote concerning my own pharmacist a few years ago.

You can give your customer more hardware, and yourself fatter margins, by selling open source and adding Windows through emulation or virtualization when necessary. You also get more control over your customer.

The lesson for vendors is to build their channels. Open source is the best pitch a VAR has to get new business.

Many entrepreneurs are big users of open source, but don’t pay for open source (or anything else) until they have a going concern.

These going concerns are great opportunities for hosted solutions, and the client need never know he’s on Linux at all.

The lesson for open source here is to focus on hosting and clouds that run Linux, selling their software as a service because it’s the best way for entrepreneurs to scale.

The real weakness for open source lies in what I call legacy enterprises.

These are not small businesses, and they’re not usually new businesses. They’re going concerns which scaled their systems when Windows was the only client-server choice.

Switching now may seem like a big, “bet the business” change. And most legacy enterprises are conservative in the best ways — they know what works and resist changing their operations.

These folks are tough to switch. Their budgets can afford Windows, Office and Oracle. The update and upgrade “taxes” these firms impose are just a cost of doing business.

You can’t try to hit these clients up in a crisis, either. If a big client goes toes-up, or a tornado blows through, computing does not top their list of concerns.

Your best chance lies at a time of positive change. When there’s a big new contract requiring a general expansion or a new facility, then these folks can see open source savings coming to their bottom line.

But that’s a rare event. This is the heart of the “SMB problem” for open source.  Legacy businesses may be where the money is, but it’s not where the growth is. Go for the real little guys, and the entrepreneurs, first.

June 11th, 2009

IBM expects Linux to make money

Posted by Dana Blankenhorn @ 11:43 am

Categories: Cloud Computing, Development, General, Hardware, IBM, Linux, Linux Server OS, Strategy, resellers

Tags: IBM Corp., Bob Sutor, Rush Transcript, Linux, UNIX, Operating Systems, Open Source, Software, Dana Blankenhorn

IBM has combined its “church” and “state” Linux functions under Bob Sutor, whose title now reads vice president of open source and Linux. (Picture from the resume page of Sutor’s Web site.)

In the latest installment of his podcast interviews, Linux Foundation executive director Jim Zemlin found Sutor focused mainly on opportunities for server and cloud Linux, through partnerships with Red Hat and Novell.

A rush transcript has been posted to the Linux Foundation web site, for those who find reading faster than listening.

Sutor’s latest promotion gave him not only corporate responsibility for Linux but profit responsibility also. 

“If it’s IBM software, and if it runs on Linux, I care about it, and from a software company perspective, we want to sell more of it,” he told Zemlin, and much of the discussion involved IBM’s search for Linux profits.

Sutor described Linux as a secret sauce that lets it sell complete systems which may include Tivoli management, Rational tools, Websphere web servers, and IBM hardware. He said IBM currently has over 500 software products running on Linux and over 30,000 Linux desktops.

Read the rest of this entry »

June 8th, 2009

Invisible Linux

Posted by Dana Blankenhorn @ 2:57 am

Categories: General, Linux, Linux Handheld, Microsoft, Strategy, marketing, mass market, resellers

Tags: Linux, UNIX, Operating Systems, Open Source, Software, Dana Blankenhorn

To Jim Zemlin you need no longer care about your operating system.

You don’t buy an operating system. You buy a gadget that runs a program. The gadget and its software are one unit.

I call this Invisible Linux.

Once again, the channel has been lost to Windows. Efforts to use Taiwanese OEMS and their tiny netbooks to create real competition for Windows at retail have been lost.

But Jim Zemlin is not deterred. Nor should Linux advocates. Because what he is suggesting has a certain logic to it.

This is the pitch he gave at CompuTex. Use Linux in your gadget, show only the application, and capture the extra margin.

I have seen people on this trip sporting the new HTC Mobile phone, a Google Android phone made in Taiwan, so the message is getting through. You don’t need to know if your GPS system is running Linux, or your phone, or any other embedded device performing a set of defined tasks.

At the same time you don’t need to know that Google runs Linux, that most top Web sites run Apache servers under Linux, or that your office may be running Linux right now, while what looks like your Windows desktop is actually a virtualizer.

Bill Gates’ heirs have done a masterful job pushing Windows up and down the channel. But tomorrow’s products may not use that channel. They may not need it.

Who cares whether Linux is visible or invisible, so long as it’s there? Do you?

Do you care whether Linux is visible or invisible?

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June 8th, 2009

No penguins in Akihibara

Posted by Dana Blankenhorn @ 2:44 am

Categories: Apple, General, Hardware, Microsoft, resellers

Tags: Card, Advertisement, Apple iMac, Linux, Microsoft Windows, Operating Systems, UNIX, Open Source, Software, Dana Blankenhorn

Today in Tokyo, I set myself the task of finding Linux in the Akihibara, which advertises itself to the world as Tokyo’s electronic wonderland.

I should have stayed on the train.

To the right is the only penguin I found. It’s an ad for the Suica card, an ingenious attempt to replace the present system of paper cards with a single, renewable plastic one. The penguin in the lower right is the card’s mascot.

The ad says that you can load money into the card, through cash or credit card, in any train station, then use the card at local merchants to get a small discount. It turns the transit system into a bank, it’s safer for the merchants than a credit card, and it cuts the use of cardboard.

But that was it for penguins today.

None of the stores I saw displayed Linux on any of the devices I saw. Not the giant department-like stores, not the tiny kiosks.

Whether it was a desktop, laptop, notebook, netbook or sub-notebook like the Sony Vaio (whose ad of a Vaio rising out of a woman’s tight jeans as she walks, and her pushing it back into the pocket, is a subway ad classic) today’s Akihibara is all Windows, all the time.

You can get a Mac in the Akihibara. There are a few shops specializing in Apple, including a very nice one run by Softbank, the huge Japanese retailer. In the iMac store the iMacs are displayed running iMac ads, Apple’s trade dress is i-everywhere. And a few kiosk-sized stores sell iPods at discount.

But for the general market, here as at CompuTex, it’s Windows. There is Windows XP on netbooks and Windows Vista on notebooks, there are sometimes mentions of Windows 7 and even Microsoft Office bundles, but no Linux anywhere I could find.

After several hours of fruitless searching I found the largest store I could, the giant Yodabashi Akira, and started asking the help for Linux.

No, no, and no said the first people I talked to.

Finally I found a supervisor. “No Linux, just Windows,” he thundered.

OK, then.

The problem is one I have discussed before. There is a price lower than free. There is the money needed to drive a product through sales channels, which Linux strips out, as a feature. What’s the value to a store of something you can download for nothing? Why should they carry it? Why should they mention it exists?

I’ll let you answer that question. While you’re waking up I’ll be taking my Suica card to dinner.

April 15th, 2009

Why open source needs the SYNNEX channel

Posted by Dana Blankenhorn @ 6:38 am

Categories: General, Implementations, Linux, Red Hat, marketing, resellers, support

Tags: Red Hat Inc., Synnex, Retail, Open Source, Channel Management, Marketing, Dana Blankenhorn

The most important point I tried to make in yesterday’s controversial post was that, for retailers, there is something beyond free, a price lower than zero.

That price is sales support. It comes in many forms. Collateral materials, promotions, co-op ad dollars, customer support.

Since they have no guaranteed money coming in, even after the product is moved, open source vendors can’t make big promises along these lines, and thus sell direct, not through channels.

All of which makes Red Hat’s Open Source Channel Alliance a much bigger story than you imagine.

This is not aimed at retail, in the sense of a Fry’s or a Best Buy. It’s aimed at what used to be called the VAR market, the Value Added Reseller, being a joint-venture between Red Hat and SYNNEX, a business distributor which calls itself a “business process services” company.

The best news may be that this deal is as important for SYNNEX as for Red Hat, given that the former was dropped by IBM last year, for reasons that make SYNNEX sound like a pretty good outfit.

Unlike earlier efforts, which aimed to organize small VARs and encourage them toward open source, this new group is top-down. It’s SYNNEX putting together an ecosystem of tool vendors that can replace IBM in its line-up.

This makes the deal important for Red Hat, too. It expands its footprint among the mid-market enterprises it has long targeted. But there are risks. The non-performance of OSCA members will rub off on Red Hat just as their positive performances will.

This means bigger deals are the target, and SYNNEX will have a heart-attack serious emphasis on vendor performance, not just in vague “support” efforts but in getting customers’ kit working and paying for itself.

This will, in turn, cause all the members of the alliance, like Jaspersoft, Zenoss and Alfresco, to raise their games. If SYNNEX is going to bring you in on engagements where the other choice was IBM, your efforts will be compared directly to theirs and you had better measure up.

So in some ways this is like getting a call-up to “the show,” and those who don’t perform go down to the minors. Perhaps to stay. The manager as well as the players.

April 14th, 2009

Why Microsoft won round one of netbook wars

Posted by Dana Blankenhorn @ 8:26 am

Categories: General, Hardware, Linux, Linux Laptop, Microsoft, business models, mass market, resellers

Tags: Microsoft Corp., Netbook, Netbooks, Nettops & MIDs, Hardware, Dana Blankenhorn

During yesterday’s blackout in Atlanta I took my family into the wilds of Gwinnett County, for food with a side of Fry’s.

It was there, while my kids perused the latest video games, that I learned why Microsoft won this round of the Netbook wars.

And there is no doubt they won it.

There are, at Fry’s, a number of Netbooks on offer, including two that are true Netbooks — no moving parts. Others had 160 GByte hard drives built-in, which I think violates the spirit of the design.

None ran Linux. All ran Windows.

The salesman was a Linux enthusiast, however, and was able to explain just why you can’t get Ubuntu there.

Free is not the lowest possible price. If you want to get sell-through at retail, you have to support the product with collateral materials, with ads, with sales training and support.

Ubuntu, as a company, is not scaled to do this. Microsoft, on the other hand, has already delivered this, for years. Thus the few Netbook units on display run what is now, essentially, the “free” version of Windows, XP Home. Once you get into a true laptop, you’re still stuck with Vista. I avoided that section.

I walked out with an HP 1010NR, refurbished. Its “hard drive” is an internal 8 GByte stick, but I was able to add another 32 GBytes for just $50 (with rebate) and, with a slick little case, spent less than $350 (including tax) for a perfectly usable Internet-capable machine.

I made a special point of checking out the keyboard. It’s not perfect, but it is much better than those on the Asus and Acer Netbooks I have seen before. Chinese OEMs don’t yet understand that some westerners are touch typists, and need a certain amount of room so the digits can play it like a piano.

Well, the total damages came to $450. The kids wanted games, and I needed a battery-operated alarm clock in case the lights go out again.

This will prove useful for my coming trip to…China.

More on that later.

October 16th, 2008

How Cisco exploits open source

Posted by Dana Blankenhorn @ 11:43 am

Categories: Applications, Development, General, Hardware, Internet, LANs and WANs, Strategy, business models, marketing, resellers

Tags: Cisco Systems Inc., Open Source, Dana Blankenhorn, Router, Partner, Routers & Switches, Linux, Network Technology, Networking, Operating Systems

Cisco AXP Platform diagram, October 2008Through partners.

Cisco, facing growing pressure from open source Vyatta (turn your used servers into routers, free), is adding Linux to its routers and hoping partners can help it keep its margins high.

A good example of how this works is the AXP Routers for Branch Offices the company announced in April.

Sashi Kiran, whose title is senior manager – network systems, gave me an update on how this is going today.

The AXP line offers Linux-based integration with a downloadable SDK, targeting an underserved niche. 

“Despite the economy we’re seeing a growth in the number of branches and the number of people working in them. Anything we can do in the branch has a definite impact on the cost structure as well as the people experience.”

The AXP line launched with 8 partners and 11 applications. Sounds small until you look at what is involved, as Kiran explained while announcing two new ones, Tiani SpirIT and Global Protocols.

Tiani, which is based in Austria, takes “proprietary formats for medical imaging, integrates it into a single format, and delivers that to a doctor in any facility” under the IHE standards.

Said simply, they can take your MRI as a file and get it right into your doctor’s office, fully integrated with your medical history. Or your x-rays. Or dozens of other scans.

Global  “works to military requirements,” bouncing data off space satellites while protecting it from snoops.

Put simply, they can play Osama I see you, getting images back to base (or the White House) in time to make the decision to take him out.

Cool. In both cases.

You can see how the branch office router technology is a pretty small part of the buy here. Cisco sells through both its partners’ reps and its own people. Customers choose which way to go.

Now at this point the fact that those branch office routers run Linux is not what makes the sale.

So Cisco is looking to expand its partnership base with a developer contest, $100,000 in valuable prizes for the best applications that “think inside the box.” (Get it. Inside the box.)

Can’t afford your own Cisco router, Mr. Open Source Developer? Tell you what Mr. Kiran is going to do, and not just becuse he likes you (which he insists he does.)

“Working with VMWare we developed an emulated blade for AXP. They can download that and develop just as if they had a physical module. The coding and testing can be done offline. We are making this available free and it will help engineers speed up the development cycle.”

Let’s summarize. Accelerate development to create more partners, make high-end partners some serious coin, and who do you think the open source guys are going to hit on first when they have ideas to market?

That’s the pitch anyway.

August 29th, 2008

Where the Linux laptops live

Posted by Dana Blankenhorn @ 10:29 am

Categories: General, Hardware, Linux, Linux Desktop OS, Linux Laptop, management, mass market, resellers

Tags: ASUS, Linux Laptop, Dell Computer Corp., Amazon.com Inc., Laptop Computer, Linux, Notebooks, UNIX, Operating Systems, Open Source

ASUS EEEpc 900 from Amazon.comAmazon.

Almost one-third of the 25 top-selling laptops at Amazon.com are sold with Linux. (Shown is their top-selling Linux laptop, an Asus EEEpc 900 unit.)

When I last reported on my search for such a laptop, we learned that this is not something you just go into a store and ask for, unless you like blank stares from clerks.

But a correspondent linked me to an Amazon page showing a number of Linux-based laptop configurations, mostly from MSI and Asus. So I asked their nice PR lady about it.

Her response was to send me a list, compiled based on sales data, of the 25 most popular laptop configurations currently on sale at the site. Eight of them ship with Linux.

Most are versions of the Asus EEEpc, a “netbook” which has suddenly gained enormous traction in the market. But at least one is an Acer unit, weighing just three pounds. Sweet.  

Both companies offer Windows XP or Vista on their gear as well, and there were plenty of these on the list.

It may well be the growth of the netbook category that has sunk shares in Dell, which is only now in the process of rolling one out.

None of the models on the Top 25 list sent by Amazon was a Dell, although three come from HP, and four of the top 12 are Macs. Amazon does stock some Dell Latitude notebooks.

My own theory is that, thanks to the ubiquity of broadband Internet, configurations have stabilized, giving mass-production Asian houses an enormous advantage over the mass-customization Dell has long practiced.

What do you think? Or could it be that Linux makes this category highly viable? Or that everyone’s now pirating Windows?

August 21st, 2008

The new Intel gets open source mojo with SpikeSource

Posted by Dana Blankenhorn @ 5:06 am

Categories: General, business models, management, marketing, resellers

Tags: Intel Corp., Open Source Player, Open Source, Dana Blankenhorn

Kim Polese, SpikesourceThe biggest business story of the year may be the transformation of Intel from a tech-driven chipmaker to a marketing-driven products-and-services company.

I have talked about this with regard to health care but the transformation is more far-ranging than that.

Take the field of software, where Intel is working with SpikeSource to “build a large scaled business around enabling the long tail of ISVs to reach the mass market.”

That’s the way SpikeSource CEO Kim Polese (above, from Wikimedia) puts it. (She is fluent in both buzzword and English.)

What she’s talking about is an ongoing effort to wrap Intel’s brand around a “certification” program powered by SpikeSource.

This is important for open source businesses, because once you jump through the hoops your wares are on a level playing field with the big boys, and enterprises are told to trust you.

“Open source is becoming software,” just as a decade ago ecommerce was becoming commerce, she explained. Everyone is mixed source.

Every company can focus on the value of collaboration. Pure open source players are becoming thin on the ground.

Why is Intel doing this? “They want to enable the broad software vendors on the Intel platform,” said Polese.

Translation. They’re making a market, taking a cut, and learning who is doing what, in a granular way, from the ground up.

The key to this story is that Intel is still in a learning mode, still gathering INTELligence, if you will. Whether they can act on this in a variety of marketplaces remains an open question.

I would hesitate to bet against them. They are moving far more methodically than before, with far more data, and far more stealth.

By the time anyone notices the transformation, it will be complete.

August 20th, 2008

Third party support, threat or menace?

Posted by Dana Blankenhorn @ 7:37 am

Categories: Development, General, Strategy, business models, resellers, support

Tags: Third Party, Internet Service Providers (ISPs), Retail, Channel Management, Investment, Internet, Marketing, Finance, Dana Blankenhorn

Covalent bonding, from a British couseware outfit at http://www.ider.herts.ac.ukNeither.

The correct answer is channel. (One third party support company named itself for this, the covalent bonds in chemistry.)

Dave Rosenberg of Mulesource is flummoxed about third party support, worried that it’s taking money out of what should be developers’ pockets.

Actually, Dave, it’s creating a channel.

It’s customers who are reluctant to support third party open source support. I was shocked several months ago when SpringSource bought Covalent, a third party support outfit. Shocked that SpringSource was so much bigger.

Where would Microsoft be without third party support, those ISPs and VARs who extend its reach into places it can’t afford to go?

Channels like third party support companies need to be nourished, not feared. Offer their people special classes. Give them special badges at your own support events. Throw them a party, buy them a beer.

It’s true that, at first blush, you seem to be competing with third party support companies. You see a dollar going into someone else’s pocket and you’re not even getting a taste.

But those companies are dependent upon you, for most of the improvements they’re selling. Their existance is a vote of confidence in your software. They want to give you a taste of that dollar in their pocket.

Capitalize on it.

August 13th, 2008

No retail channel for laptop Linux

Posted by Dana Blankenhorn @ 8:11 am

Categories: General, Hardware, Linux, Linux Desktop OS, Linux Laptop, business models, marketing, mass market, resellers

Tags: Laptop Computer, Linux, UNIX, Operating Systems, Open Source, Software, Dana Blankenhorn

Tommy Bass at Mt. HoodAs promised, I sent a reporter into local stores this weekend, looking for laptop Linux.

To protect my identity, I disguised myself as a 63-year old Vietnam veteran named T. Bass. (OK, I bought him lunch and he called me when he finished.)

Tommy visited chain stores in Atlanta and Columbus, as well as a small Atlanta retailer, and drew all the blank looks I expected.

One Geek Squad member suggested he go online, and said Dell is selling kit. An H-P representative he happened upon admitted they got nothing.

This is why Linux remains, in the desktop and laptop space, a hobbyist market. It only exists through the online channels hobbyists use.

This is true even though Linux is lighter in its use of system resources than Windows, and many popular applications come in Linux versions.

Of course, when Wal-Mart offered bargain Linux boxes last year they flew off the shelves. It’s not a question of demand.

It’s a question of supply. Retailers insist on higher-priced goods for the sake of their margins. Microsoft’s policies push manufacturers into putting Windows on everything they push down the channel.

Yet I’ve seen how Value-Added Resellers can up-sell hardware and capture niches for Linux, in areas like retailing and education.

For most consumers, however, there’s still a big gap between them and a Linux laptop. Stores.

August 6th, 2008

Microsoft contracts stymie IBM laptop Linux plans

Posted by Dana Blankenhorn @ 1:59 pm

Categories: General, Hardware, IBM, Linux Laptop, LinuxWorld, marketing, mass market, resellers, software appliance

Tags: microsoft corp., hardware, laptop computer, ibm corp., linux, microsoft windows, operating systems, unix, open source, software

Back Alley illustration from ZDNet’s Apple Core blogI admire the audacity of what IBM is trying to do with its “Linux on a stick” program.

(This picture first appeared at our fine Apple Core blog in November. Say hi to Jason and David for me.)

It is amazing how cheap stick memories have gotten. Down at the local Fry’s you can get an 8 Gbyte stick for $35. I’m old enough to remember 5 1/4 floppies with 128Kbytes. (Hey, Sparky, today’s 6th graders have no memory of 9/11.)

But the hardware side of this remains a big problem, as I’m learning in my Linux laptop experiment.

It’s the channel, stupid. IBM abandoned PC retailing when it sold its PC business to Lenovo of China, four years ago now, but here in the world the channel is where we get our stuff.

So I used my fingers to do a little shopping and educate Big Blue.

When it comes to new hardware, most makers charge you for Windows even if you don’t get it. They do this to maintain their relationship with Microsoft.

Sometimes they’ll load something like FreeDOS on for you, but the cost of Windows is usually baked-into the price you pay.

Small dealers, like LinuxCertified, sell Linux-only laptops, but given their small quantities their rock-bottom price can be higher than what you’d pay for a similar Windows machine.

Given the fact that it takes less power and storage to run Linux than it does Vista, a used market might sound nice. But the savings aren’t huge and who are you dealing with?

The target market for Linux on a stick may be existing Windows users, but if your Windows laptop is working why do you want to get (and learn) a second OS, unless you are (like me) really, really motivated?

And then, as I noted in the first episode of this series, my story started when my Windows hardware fried. I need both hardware and software to happen.

This weekend I’m going to drop by some stores, get funny looks from clerks, and maybe take pictures of those funny looks for your amusement.

Jose Jalapeno, a puppet by Jeff DunhamBut, personally, I won’t be amused.

(Jeff Dunham, who performs Jose Jalapeno on a stick (left) is very amusing.)

For the Linux laptop to be more than a hobbyist toy it needs a wider channel.

Linux (on a stick) won’t do the job.

August 6th, 2008

IBM's clever idea is Linux on a stick

Posted by Dana Blankenhorn @ 7:23 am

Categories: Applications, General, IBM, LinuxWorld, Strategy, business models, resellers, software appliance, support, ~Events~

Tags: Idea, IBM Corp., Linux, Open Source, UNIX, Operating Systems, Retail, Software, Dana Blankenhorn

IBM logoIBM remains a quiet, background presence at LinuxWorld, 10 years after it began supporting the open source operating system.

But it has some great ideas.

Eclipse was a great idea. Here’s another: an IBM software appliance toolkit gives VARs a single stick memory or DVD they can install to get vertical market customers going.

The idea, the company says, is to get customers rolling in one-to-five mouse clicks.

Developing a channel is the key to increasing business market share, and software appliances can do that.

Now if they could give me one for desktop Linux, I could turn any PC into a Linux laptop.

July 28th, 2008

Can open source kick-start the hardware hobbyist market?

Posted by Dana Blankenhorn @ 2:16 pm

Categories: Development, General, Hardware, business models, resellers, support

Tags: Hobbyist, Electronics, Texas Instruments Inc., Hardware, Open Source, Dana Blankenhorn

Beagle Board from Digi-KeyOpen source has done a lot over the last 10 years.

But can it kick-start a hobbyist market for hardware?

Texas Instruments thinks it can. That is why they have placed their latest OMAP 35xx chip on to a USB-powered board for distribution by Digi-Key of Minnesota.

The resulting product is called the Beagle Board, and it went on sale online this week, said Jason Kridner, open platforms principal architect for TI. Want a second distribution option? It will be on print catalogs in time for Christmas.

“We’ve got 480 developers on the mailing list, and they talk about applications in gaming, smart cards, media centers, prosthetic medical devices, even autonomous robots.”

If you’re an OEM looking to translate that USB power requirement into terms you understand, it’s a five-volt power source.

“This is going after a new customer base. This is going after a hobbyist base, students and open source developers. They won’t build products directly. This is the end product for them.”  

“The other aspect is this is a different support model – it’s community oriented support. To really allow us to reach a lot more people this is not going to be a TI product. It’s going under the name Digi-key.”

Digi-Key, for those who don’t know, is a $370 million electronics distributor based in the little town of Thief River Falls, which is way north of Lake Wobegon, about 30 miles east of I-29 and the Red River valley of North Dakota.

If you’re an electronics hobbyist with Internet access, however, that’s the corner of 42nd Street and Broadway.

 

July 16th, 2008

How good is open source support?

Posted by Dana Blankenhorn @ 8:54 am

Categories: General, Hardware, Not Linux, business models, resellers, support

Tags: Support, Alfresco, Open Source, Cable, Telecommunications, Personal Technology, Dana Blankenhorn

Ralph Kirkland, inhousetechsupport.blogspot.comThe cheap answer is “as good as you make it.”

The real answer is more complex.

As our friend Big Money Matt notes today, open source vendors are not really selling software, just support, and they have an image problem.

The image of enterprise customers is their support isn’t as good as that of Oracle or Microsoft. This could be because most such vendors, like Alfresco, are fairly small.

It could be that the market is diffuse, with many third-party support organizations competing with vendors. Would it be better if they could just get along?

Or it could be real. Because what is meant by the word support is often in the eye of the beholder.

To an open source vendor, it can mean the attention of the person who wrote the program. It can mean community contacts to get bugs fixed quickly. Your guy calls my guy and we work things out.

To a big enterprise, it may mean the ability to train, deliver, and physically support thousands of desktops, or hundreds of servers. It may mean the ability to handle a non-software problem, like security, in a scaled manner.

Big vendors have grown to handle these challenges. Small ones have not. Alfresco is not IBM.

To individuals, on the other hand, support is often unneeded, but when it is needed it is well worth paying for. I’ve faced that several times, most recently when a lightning strike knocked me offline for several days last week.

My support guy, Ralph Kirkland, had me back online days before Comcast, my ISP, could even get to my house. He lent me a cable modem, a router, and installed a new Ethernet card. (That’s Ralph sitting at my desk above.)

He even helped me ask Comcast the right questions when they finally did come by — turns out my 25 year old cable connection was never properly grounded.

So support, for me, is like the police. I don’t need it unless I need it, and then I need it badly. I need it here and I need it now.

The point here is there are many types of support. There is ongoing support, there is on-call support, and there is personal support.

How do you like your open source support, and what should be done to make it better?

How do you rate your open source support?

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July 11th, 2008

Ubuntu goes with newspaper model in consumer market

Posted by Dana Blankenhorn @ 7:25 am

Categories: Distributions, General, Linux, Linux Desktop OS, business models, marketing, mass market, publishing, resellers

Tags: Ubuntu, Open Source, Dana Blankenhorn

Ubuntu logoNewspapers are free.

By that I mean the price you pay for a newspaper has nothing to do with the cost of prodution, including its editorial costs.

What you’re paying are delivery costs, the money needed to get that paper from the plant to your door or your vendor’s stand.

By selling disks of its free software for $19.99, Ubuntu is doing the same thing. The money pays for BestBuy to deliver it to stores, for shelf space, and for tracking sales.

We have, in fact, been here before.

Back in the late 20th century, floppies with shareware were sold in stores and at trade shows for $5-10 each. Again, the money went to distribution.

The software would then try to tease more money out with ads, nagging, or by turning itself off after a few uses. (Ask your dad about that.)

Ubuntu does not have to do any of this, although contributions of time, code and money are always appreciated. What it’s trying to do is find an audience which has hardware but lacks regular Internet access or knowledge.

Believe it or not, there are such people.

Big Money Matt suggests, quite rightly, that the key here will be whether Ubuntu stays with the program, noting Red Hat didn’t. But Red Hat was never really a consumer product. Ubuntu is.

If delivering bits in bulk from the back of a truck sounds like a step backward, it is. But the stupidities of the Internet market are, as Alton Brown might say, another show.

June 16th, 2008

Open source is not a vertical

Posted by Dana Blankenhorn @ 6:50 am

Categories: General, Government, Strategy, business models, education, politics, resellers, support

Tags: Open Source, Dana Blankenhorn

Mark Taylor, Open Source Consortium and Sirius IT presidentThe UK row over handing control of the country’s open source education planning to an education expert, rather than an open source expert, shows the continuing immaturity of open source as a business sector.

This should have been anticipated. The contract was awarded by an outfit called Becta, a charitable government advisor known as a quango, which the winning partners have worked with often.

Open source advocates bid for the project separately, thinking that would provide competition. Had their combined weight still lost they might have had cause for complaint.

This didn’t stop them from complaining anyway.

“Becta’s open-source posturing is exposed as a sham, empty spin covering ‘business as usual’ political sleaze,” wrote Mark Taylor (above),  president of the Open Source Consortium.

Well, he’s also the president of Sirius, one of the losing bidders. (When he got angry, it’s strange the Inquirer didn’t make some sort of pun on Sirius feeling black.)

One of the first things Microsoft re-sellers learn, if they want to grow, is it’s no good just hanging a Microsoft sign on your front door. You need to specialize. You need to know an industry, a vertical, you need to have an angle.

Open source consultants either don’t think the market is big enough to specialize, or think open source itself is a specialty. It’s not. Any more than Microsoft is a specialty.

Seeing open source as a specialty is looking at the customer’s needs through your own eyes, blind to the needs of the one paying the bills. Which is a great way to get blindsided and wind up crying foul over something that’s really quite fair.

To get the order, know the customer. This is true for open source customers as for those using any technology.

Dana BlankenhornDana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.

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