Community Column: Is Linux Hurting the IT Industry?Mar 17, 2001, 07:13 (58 Talkback[s])
(Other stories by Gareth Barnard)
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Recently Jim Allchin of Microsoft said that Linux is un-American and a destroyer of intellectual property. His comments created a lot of amusement in the Linux community. But after thinking about it I realized he had a point.
The NASDAQ index, which contains a lot of tech stocks, reached a peak in March 2000 and then started steadily sinking. Now, a year later, it has lost more than half its value. Hundreds of dot-coms have turned into dot-gones. Most of these failures were due to bad business plans. Anyone who thought that he could make money by selling dog food or beer over the Internet deserved to lose his shirt. Investors have lost confidence, and startups that have a good business plan and a good product have trouble finding funding.
In late 2000 the rest of the IT industry went into a slump. Major players such as Oracle, Dell and Compaq reported lower-than-expected earnings. It's easy to assume that they had caught the disease which was killing dot-coms. But a correction in the PC market was inevitable, and the dot-com slump merely accelerated its decline.
For ten years, Microsoft and Intel conspired between them to drive the PC market in an upward spiral. Each iteration of Windows required a faster processor and more memory. The PC makers sold more computers and Microsoft sold more copies of pre-loaded Windows.
Before the introduction of Windows 2000, Microsoft made it clear that it had to sell like hot cakes so that MS could maintain the momentum it had built up in the 90's. But the business market for PCs is saturated or nearly saturated, and that momentum could not be sustained indefinitely, just as the rise in the NASDAQ could not be sustained indefinitely.
Realize also that the Internet was expanding rapidly in the late 90's. Many small Internet companies were founded, and usually they bought low-end web servers with Windows pre-loaded. Only large companies could buy from Sun, IBM or Hewlett-Packard. Since dot-coms had bought Intel-based machines, the PC manufacturers started feeling the pinch.
Then, in 2000, one company after another was thrown onto the dot-compost heap. The revenue stream dried up and there was no money for new hardware. So now, when you need a new web server, you go to the boneyard. Every company has one. You pull out an old machine with a 200-MHz Pentium and 64 Mb of RAM. You load Linux and you're good to go. That's one less Pentium sold and one less copy of Windows 2000.
And don't forget all the free software you get with every Linux distro. Every copy of Star Office downloaded is one less copy of MS Office sold. Every copy of Zope downloaded is one more copy of Front Page still on the shelf. Visual Basic is retreating in the face of Perl and Python. Every installation of mySQL is one less installation of Oracle. A Beowulf cluster running mySQL is more cost-effective than a Sun 250 with Oracle, largely because you don't have to pay Sun and Oracle to maintain it.
Cisco's earnings were sharply down in Q4 2001 and they are laying off workers. Maybe people are discovering that, instead of spending thousands of dollars on a Cisco router you can take an old 486 and install some Ethernet cards and a copy of Linux Router. Instead of buying a firewall from Cisco, buy a used computer and install Mandrake Linux. Do you need a file server? Samba. An email server? Sendmail.
I can heard hordes of little Penguinistas muttering, "Linux is only hurting the people who should be hurt." The Linux movement has always had an anti-establishment and anti-commercial slant, which is part of the reason it appeals to aging Flower Children like myself. IBM tried to tap into that Sixties ambience with their "Peace, Love and Linux" advertising campaign.
IBM and Sun Microsystems were two companies that did well in 2000. Big Blue has thrown its weight behind Linux and most of the Linux servers that were sold in 2000 were sold by IBM. Sun's attitude toward Linux has been ambivalent but they have supported Linux indirectly, by supporting Java on Linux. Maybe the Age of Aquarius has become the Age of Linux, and there is some Open Source karma which rewards those who have set their feet on the path of enlightenment.
But Linux is not to blame for the IT slump. Certain parties are starting to reap the fruit of their own stupidity and greed. Intel grew complacent, and AMD was able to steal market share. Windows 95 was a dramatic improvement over Windows 3.11 but since then Microsoft has entered the area of diminishing returns. MS Word users refuse to upgrade because they don't need any more features. Windows 2000 does not have enough new features to justify switching from WinNT 4.0, and it is actually slower and less stable.
Sooner or later, buyers will realize that MS's practice of discarding the code base every three years results in slow, bloated, buggy software. They will realize that there is only one way to write good software; make the source code public and refine it over a period of decades. Sooner or later, corporate America will bow down before the penguin.
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