Mass market not ready for Linux, say PC vendors SA vendors are cautiously starting to offer Linux options on consumer PCs. But offering it across the board isn`t viable yet, since there`s practically no demand. Sahara says India`s Linux success proves otherwise. THE AVERAGE CONSUMER could be forgiven for believing there is only one choice when it comes to a PC operating system (OS). A quick visit to www.digitalplanet.co.za would only reinforce that false impression: on the operating systems page there are 11 products, all from Microsoft and all derivatives of Windows.

Few consumers would have even heard of Linux, which is exactly the way Microsoft would like it to stay. However, Linux proponents often claim varied value propositions presented by the alternative to Windows.

When assessing value, the first consideration is usually price. It has long been thought that a Windows PC would cost considerably more than the same machine equipped with Linux. This was, unfortunately, very difficult to prove because manufacturers refused to offer OS alternatives on the same model - until recently.

The first to do so was HP. A locally inspired and executed initiative was launched in SA - and apparently nowhere else - about four months ago. It illustrated clearly that any PC with Windows will cost between R500 and R800 more than the same machine loaded with Linux.

THE VALUE PROPOSITION

According to Tarsus` Jason MacMillan, the HP NX 6110 notebook PC is available at a different price depending on the OS chosen. With Windows, it goes for R4 999; with Linspire (one of the more expensive versions of Linux) it is R4 499; and for those who want to roll their own Linux, it comes with FreeDOS for R4 199.

When a consumer buys a Windows PC, all he really gets is the OS, a basic e-mail package and an Internet browser. Additional applications, like a basic office productivity suite, will cost extra. Another quick look at www.digitalplanet.co.za reveals that just one such application, Microsoft Office 2003, retails for over R2 000.

Damien Durrant, notebook product manager at HP, says that in contrast, HP`s notebook with Linspire would give users a full-featured graphical OS with a similar look and feel to Windows, a full Internet suite, a complete office productivity suite, digital photo and music managers, advanced notebook and wireless capabilities, and much more. The `much more` is quite interesting: HP is bundling a one-year subscription to Linspire`s Click n Run software repository containing more than 2 000 additional applications. The subscription usually costs around $20 (R140) annually, and if you want to try Linspire on your existing PC first, you can buy from www.linspire.com for $50 (R350).

Linspire is among the more expensive Linux distributions available today, especially considering that the majority of such distributions can be downloaded free of charge from the Internet. However, installing and using some of these could be beyond the capabilities of the average user.

CAN`T PRE-LOAD LINUX

Despite the value propositions, few manufacturers are doing much to get Linux-based PCs onto retail shelves. And those who do, choose small, typically low-end models on which to offer the alternative.

By contrast, all are offering custom-built facilities to corporate customers and government. The result is that large businesses and the public sector can get any version of Linux on any configuration PC they choose; small business or the man in the street have the option of only a few models. But why is pre-loading so important? Mark Blowers, Butler Group analyst, says: "It`s difficult to see how Linux will take off in the consumer market if it`s not pre-loaded. Most people just want a machine they can switch on, have all the applications and be up and running out of the box."

And why can`t (or won`t) manufacturers do it? Deshan Govender, desktop brand manager at Lenovo SA, says the problem has to do with the sheer number of Linux distributions available. This, he charges, creates a situation where vendors don`t know which of the many distributions to pre-load on their PCs and, worse still, test on their hardware.

"Where do we put our volumes? Do we put it on Red Hat? On Novell SuSe? On Ubuntu? It`s a difficult decision to make and we don`t want to force our customers to use any specific Linux distribution," he says. He has a point. Distrowatch.com lists well over 360 distinct `flavours` of Linux. However, Gartner`s Brian Gammage doesn`t completely accept this argument. "This is true only in the context that there is no single [distribution] that answers everybody`s problems. No, this is smoke and mirrors; this is pure cost; this is pure caution," he opines.

Butler`s Blowers doesn`t buy Govender`s argument. "To my mind, that`s a cop-out. When you`re talking Linux distributions, especially from an enterprise perspective, it`s really only Red Hat or Novell [SuSe]," he says.

van Staden" rel=tag>Muggie van Staden, MD of local Linux support specialist, Obsidian, agrees, suggesting two other distributions for the consumer market. "Xandros and Linspire are definitely getting the right idea. They are mostly desktop focused where someone like a SuSe and a Red Hat have a different take on things," he says, adding that Mark Shuttleworth`s support of Ubuntu may well make it a factor in the local market.

OPTIONS? WHAT OPTIONS?

That HP chose Linspire for its consumer-focused Linux notebook could be seen as a strong vote of confidence. Durrant offers insight into the decision-making process: "The main reason for Linspire was the familiar look and feel of the graphical interface.

"Microsoft users have a similar GUI which means it would be easy for them to understand the interface and use it. That was one reason. Linspire was also the best value proposition since it comes with a download site from which you can get 2000 additional applications," he adds.

Pinnacle Micro also didn`t have too much difficulty deciding on a distribution. ProLine brand manager Francois Lottering explains: "For the desktop machines on retail shelves we use Ubuntu, but for our large government projects we use Novell`s [SuSe] Linux."

Sahara Computer didn`t have much trouble with the supposedly difficult decision either. Deputy MD Gary Naidoo says the company investigated several distributions and talked to the Shuttleworth Foundation about Ubuntu. However, he suspects the final decision is likely to be influenced by an existing relationship with Red Hat in India.

"We are working towards getting that relationship on a global level," he says. Interestingly, Sahara is not waiting for the Red Hat deal to be finalised and the certification process to be completed. Two months ago the company launched a notebook PC running the free version of Red Hat Linux known as Fedora.

Naidoo says the machine put a price point of R3 999 into the market and is targeted at what he calls the value segment of the market. Unfortunately, it is too soon to know how successful this strategy has been locally, but he says the PCs are `flying off the shelves` in India, to the extent that Sahara is selling more Linux than Windows there.

Not so back in SA. The efforts of Pinnacle Micro have been going on for quite a while, longer than those of Sahara. Ubuntu-based PCs adorn the shelves at HiFi Corporation and JD Group stores such as Joshua Doore, Morkels and Russells.

Despite this, however, Lottering says they are not exactly selling like hot cakes. "Demand for Linux is growing but 98% of orders are still for Windows," he reports.

HP`s Durrant reveals that, despite the effective R500 discount, the NX6110 has only sold about 200 units loaded with Linspire in its first four months while the Windows units are flying out the door by comparison - at a rate of 6000 a month. Hardly a roaring success for Linux, so what`s the problem?

CHICKEN AND EGG

Dean Barkhuizen, MD of the Mecer division of Mustek, describes it as a chicken and egg scenario: there is not enough demand for Linux-based PCs to justify the investment in stock and assembly; and without stock in the retail channel that demand won`t come.

Govender sums the vendor dilemma up succinctly: "If everybody wanted Linux we would be stupid not to put it on the box. It`s just that the volume doesn`t call for it at present." Barkhuizen says it`s about awareness: "If there`s not enough marketing, branding, customer awareness [on] a particular product, whether it be a processor or an operating system, there`s not going to be a demand. It`s very difficult for me to got out there and create that demand."

Pinnacle`s Lottering agrees: "If Linux vendors spent a small percent of Microsoft`s marketing budget, it would make our lives much easier in getting the Linux units out there," he says.

Gartner`s Gammage believes the picture is unlikely to change in the short term because the PC industry earns average margins of around 2%. He adds that prices are falling, forcing vendors to produce ever more PCs just to maintain revenues at a constant level.

"There is no revenue growth in the industry and they have to make and sell more PCs just to stand still. Add to that the fact that every PC sold usually means more money for Microsoft and for the likes of Intel or AMD and what you see is that the reduction in average prices is being funded by the PC companies," he says.

The evidence indicates that he`s right: each of the hardware vendors interviewed admitted to only having a limited number of models shipping with Linux and even fewer with FreeDOS. A reason they all cited was the need, for support reasons, to test and certify the combination of hardware and OS. Obsidian`s van Staden explains that such testing is necessary even though most distributions have the same underlying code base. "You need to ensure that each distribution carries all the drivers needed for that particular machine," he says.

SOFTLY CATCHEE MONKEY

"[Hardware vendors] will continue to be cautious. They will not take risks. They will not bring new technology to us on the off chance that it might sell. They would want to know and need to know that they can actually put products in our hands that we will buy," predicts Gammage.

Confronted with the reality of what HP, Pinnacle and Sahara are doing in the local market, he is unrepentant. "A couple of years ago I had a business discussion with a carrier company that was tremendously excited because a number of the PC companies had signed up that they would offer 3G wireless cards as an option for their PCs," he relates.

"And they were determined that this agreement meant that they would be bundled into PCs and put onto shelves. We said no, you don`t understand. These companies will sign up to anything but they`re not going to put it in until there`s money in their hands. That`s exactly the situation you`re seeing now ... with Linux. It certainly is further evidence that the nature of the balance of revenues and margins in the PC industry is working against customer choice, it is working against innovation, and it is working against PC companies going out of their way to offer us things that we might want," he adds.

All of which leaves budding Linux users with three choices: accept one of the few distribution-specific "certified" models, choose from the even shorter list of uncertified FreeDOS models, or buy the PC you want knowing you will have to pay Microsoft for the pleasure of using Linux.

CONSUMER NIRVANA

What if manufacturers, instead of pre-loading any particular OS onto their PCs, simply worked with major software vendors to ensure compatibility and shipped a selection of alternatives with each box?

Van Staden loves the idea: "That would be a great model. If [manufacturers] can see the opportunity of selling their hardware with a choice of Linux distributions, which will cost them about 12c a distribution to cut the CDs, they might realise that they`ll have less Microsoft licensing volume but more hardware volume," he says. Following such a model could, theoretically at least, provide consumers with the freedom of choice. But it would probably prove more attractive to the Linux vendors than to Microsoft, despite the fact that most users would probably still choose Windows.

The reason is simple: the payment process. Currently, all OS vendors receive payment for their software from hardware vendors and retailers after sales have been processed. The proposed model would require the OS vendors to employ online payment systems to interact directly with consumers.

Unfortunately, such a solution is more than likely just a dream. Some vendors admitted off the record that Microsoft has them between a rock and a hard place. It`s a volume business and the more Windows they sell, the bigger the discount and the more money they make.

The message is clear: PC manufacturers say they cannot fund the marketing efforts so if Linux is going to grow, the investment will have to come from the likes of Red Hat, Novell, Mandriva, Linspire, Xandros and possibly even IBM as an agnostic Linux supporter. Is it going to happen? Only time will tell.