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Study: Linux sales down, but not out (News.com)
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steblublu
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PostPosted: Thu Aug 08, 2002 11:10 pm    Post subject: Study: Linux sales down, but not out (News.com) Reply with quote

News.com reports on the latest IDC study on Linux server sales. "'The Linux operating system market, from a revenue perspective, accounts for one half of 1 percent of the total operating system revenue each year, or roughly two days' worth of Microsoft's operating system revenue,' [IDC analyst Al] Gillen said. 'On the second day of January, Microsoft had generated more operating system revenue than the Linux community (will for the entire year).'"
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Question is, does this really matter? One of the main reasons I am using linux is that it is free and opensource.
On the otherhand, it shows a lack of support from the linux community for commercial software. There have been quite a few opensource companies in the last year that have closed theior doors.

comments?
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rac
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PostPosted: Thu Aug 08, 2002 11:48 pm    Post subject: Re: Study: Linux sales down, but not out (News.com) Reply with quote

steblublu wrote:
it shows a lack of support from the linux community for commercial software.

Does it? I thought the quote referred only to operating system revenue, which I took to mean "selling operating system software", like RedHat and SuSE boxes. Since many major distributions (including Gentoo and Debian) do not receive any direct revenue, they would count as zero. I didn't get the impression that the study said anything about sales of application software that happens to run on Linux, or revenue derived from support of or custom Linux-based development. Nor, for that matter, did I think it took into account embedded Linux devices like Tivo.

The only thing that quote said to me was "gee, Microsoft sure manages to charge a lot of money for their OS software".
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JHuizingh
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PostPosted: Fri Aug 09, 2002 6:52 pm    Post subject: Reply with quote

If you take into account the fact microsoft is running on a much larger percentage of computers than linux is, and the average linux box-set is much cheaper than an ms operating system, that number sounds about right, and it's not necessarily bad.
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mksoft
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PostPosted: Sat Aug 10, 2002 8:53 am    Post subject: Reply with quote

The problem with those kind of researches/sureveys/jourlnalists is that the don't get it.

They know the rules of commercial software which is measured by number of units sold, revenues etc.

Those rules break down when you try to apply them to OpenSource/Linux. You can't learn anything from them about the penetration/market share of Linux.

So what if MS has largaer revenues (which I'm sure is ture without a doubt). This doesn't show anything (specially when you take into account their outrageous prices).

Let's assume the the study is correct and Linux really generats 0.5% of MS incomes. So what :?: Does it say how many linux servers are installed around the world :?: How many workstations are using Linux :?:

Assuming you're using Gentoo, your installation didn't generate any revenue. Does that mean the Gentoo/Linux has lack of support from users :?:

The OSS model is shifting the revenues from software sales to services.
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steblublu
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PostPosted: Sat Aug 10, 2002 11:25 am    Post subject: Reply with quote

mksoft wrote:
The problem with those kind of researches/sureveys/jourlnalists is that the don't get it.
They know the rules of commercial software which is measured by number of units sold, revenues etc.

actually, you didnt get it. It wasn't based on units sold but on revenue generated, not just on units sold. I take this to include services as well.

mksoft wrote:

Those rules break down when you try to apply them to OpenSource/Linux. You can't learn anything from them about the penetration/market share of Linux.

again, the article wasn't about penetration, but market share. Traditionally "market-share" is mesured in revenue - not in installations that did not produce revenue.

mksoft wrote:
So what if MS has largaer revenues (which I'm sure is ture without a doubt). This doesn't show anything (specially when you take into account their outrageous prices).

Microsoft's outrageous prices? I hear this alot from the ferverent. When you have to pay $70 for a game, how can you consider $200 too much for an OS? That aside, it shows that Linux hasnt made as much a dent in MS as many of us may have thought.

mksoft wrote:
Let's assume the the study is correct and Linux really generats 0.5% of MS incomes. So what :?: Does it say how many linux servers are installed around the world :?: How many workstations are using Linux :?:

I agree, it doesnt. That was my first thought.

mksoft wrote:
Assuming you're using Gentoo, your installation didn't generate any revenue. Does that mean the Gentoo/Linux has lack of support from users :?:
The OSS model is shifting the revenues from software sales to services.

That's the point though. the article was about revenue, not unit sales. I take this to mean that the Linux commuity is not generating alot of revenue yet.
Not only didnt my gentoo installation not generate a unit sale, it did not generate any service sales.

The OSS model is great for people like me - who dont really play games and use their systems either for business, hobby or development purposes.
But this model sucks for companies that will bring traditional desktop users to Linux - namely game companies.


-- One of the hottest topics on the "linux-kernel mailing list" in the past few months is the search for a sustainable and working model for software licensing. Most people agree that OSS coupled with the GPL is not economically sustainable.

.
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mksoft
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PostPosted: Sat Aug 10, 2002 1:00 pm    Post subject: Reply with quote

steblublu wrote:
actually, you didnt get it. It wasn't based on units sold but on revenue generated, not just on units sold. I take this to include services as well.


No, you said the article is about "total operating system revenue" - operating systems revenue comes from selling operating systems, not srevices.

steblublu wrote:
mksoft wrote:

Those rules break down when you try to apply them to OpenSource/Linux. You can't learn anything from them about the penetration/market share of Linux.

again, the article wasn't about penetration, but market share. Traditionally "market-share" is mesured in revenue - not in installations that did not produce revenue.


That's what I've said: you can't apply traditional market shares measurments to Linux/OSS it won't work, and you'll never get a reliable estimate for it. For example: at the time I've bought SuSE6.2 box.

I installed it on 2 my servers and on 5 of my clients servers (instead of NT at the time). The direct revenue generated was one box, but I got paid for installing, configuring and maintaining the servers for my clients (lot more than the box costs). In "Traditional market share estimates" this will account for a price of the box in revenue and market share, and that's it. In reality it is 7 servers and a lot of money that exchanged hands. That's what they don't get. Every market share assumption based on sales/revenue of OSS is flawed and shouldn't be trusted.

You can also take for example the Mandrake club. Lot's of users don't buy the box, but downloads and installs the ISO. They pay for club membership to support the company. This won't go into the revenue of operating systems as well (just like MSDN membership doesn't go into it).

steblublu wrote:
Microsoft's outrageous prices? I hear this alot from the ferverent. When you have to pay $70 for a game, how can you consider $200 too much for an OS? That aside, it shows that Linux hasnt made as much a dent in MS as many of us may have thought.


70$ for a game is outragesous as well. And when computers costs as much as 300$, 200$ just for the OS is really outrageous, not to mention the prices for Office, etc. Do you remeber how cheap was Office in the old days (when they had to compete with PerfecOffice, Harvard, Lotus etc).

Linux/GNU/OSS were not created to dent MS. They were created to better the society (RMS) and to produce a working free UNIX like kernel (Linus). For me, Microsoft is not relevant anymore, just like when Linus is asked how he feels about MS, he answers "I don't care". He just want to produce something that works. Why should we care about MS as well :?:

steblublu wrote:
That's the point though. the article was about revenue, not unit sales. I take this to mean that the Linux commuity is not generating alot of revenue yet.
Not only didnt my gentoo installation not generate a unit sale, it did not generate any service sales.

The OSS model is great for people like me - who dont really play games and use their systems either for business, hobby or development purposes.
But this model sucks for companies that will bring traditional desktop users to Linux - namely game companies.


-- One of the hottest topics on the "linux-kernel mailing list" in the past few months is the search for a sustainable and working model for software licensing. Most people agree that OSS coupled with the GPL is not economically sustainable.

.


Revenue of operating systems is the direct result of units sold, you can't seperate them.

The OSS is also shifting the revenue model. Any installation may generate a revenue, but it doesn't have to. I guess that if market share of OSS will grow, the revenue for the private sector will drop.

Most of the revenues will be from the buisiness sector. And why should we worry about other companies not being able to maximise their profits :?: The business models are shifting (just like the industrial revolution did) with the internet/OSS and so are the revenues.
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steblublu
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PostPosted: Sat Aug 10, 2002 9:14 pm    Post subject: Reply with quote

mksoft wrote:
No, you said the article is about "total operating system revenue" - operating systems revenue comes from selling operating systems, not srevices.


check the article out at:
http://news.com.com/2100-1001-948678.html
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PostPosted: Sat Aug 10, 2002 10:27 pm    Post subject: Reply with quote

I've read it. Where do to mention services :?: No mention of companies selling services for linux, just distributors.
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PostPosted: Fri Aug 16, 2002 1:19 am    Post subject: Reply with quote

mksoft wrote:
I've read it. Where do to mention services :?: No mention of companies selling services for linux, just distributors.


from the article:
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" For example, Red Hat doesn't offer downloads with which others can easily create installation CDs for its high-end Advanced Server edition. And while the software may be installed on multiple computers--unlike Windows--Red Hat charges per server for subscriptions to the Red Hat Network for online services."
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they are charging for the subscription service.
the current economic structure that the linux community currently lives in is mostly supported through the sale of services, not OS unit sales (actually, i have no hard numbers on this, so it's conjecture on my part).
Unless there is a radical paradim shift , it will have to continue to concentrate marketing efforts on the sale of services.

There have been some great discussions on the "linux-kernel mailinglist" the past few months regarding revenue streams, and the economics of linux - although i've never seen Linus ever comment on this at all. You might find it semi-interesting to search their archives. I don't recommend subscribing to the list though - i get about 400-500 emails a day just from that list.

.
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