Editor 9-Nov-03 - rev 9-Nov-03
Novell Rocks
Red Hat Focuses
IBM Endorses
Microsoft Sweats

Major moves will radically change the information systems landscape and change the fortunes of leading technology companies. You, the business person, will need to be quick on your feet to maintain a relevant information structure.


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Index

Services

6-Nov-03
Accounting Systems

29-Oct-03
Microsoft buys Macs

23-Aug-03
Worms eat Windows

19-May-03
SCO sues IBM

15-May-03
RIAA vs Peer-to-peer

30-Mar-03
Office Depot Aids Monopoly

23-Feb-03
2003 & Beyond

2-Jun-02
You've got Klez!

13-Apr-02
MS Office .NET

28-Jan-02
The DoJ Settlement

04-Aug-01
Tech Stocks Tank

04-Aug-01
MS Guns for Intuit

04-Aug-01
.Net Gains Speed

15-Jul-01
Court of Appeals: Guilty!

13-Jul-01
Back in Operation

09-Feb-01
Software Licensing

15-Jan-01
Is Linux for Your Business?

1-Jan-01
Predictions

25-Dec-00
Microsoft Invades Accounting

21-Dec-00
.Net Takes Shape

24-Nov-00
The Next Windows

08-Oct-00
Winds of Change

23-Jun-00
Microsoft .Net

10-Jun-00
Microsoft strikes out at Linux

7-Jun-00
Tried, Guilty, Sentenced

28-May-00
OS/2 Finally Dead

11-May-00
The ILOVEYOU Worm

6-Apr-00
What's to be done with Microsoft

25-Mar-00
Our Web comes alive again

Microsoft's Season of Discontent

Microsoft has long been criticized for a culture of paranoia, but it's starting to look more than justified. Their controversial anti-trust settlement threatens to come unraveled on two fronts (A10, A11). Nearly two years after proclaiming "Trustworthy Computing" the worms are coming on so strong a desperate Microsoft is issuing quarter million dollar bounties for the capture of worm writers (A3).

Microsoft has admitted losing $768 million in "unearned income" (license agreement renewals) due to security problems (A12). A few investment analysts have started describing Microsoft as "Ex-growth" (A1) which has negatively affected their all-important stock valuation, which had already been trailing the NASDAQ average badly. If other voices join the chorus it could do severe and permanent damage.

Microsoft's next generation computing platform, Longhorn, a strong return to a strategy of customer lock-in, is already admitted late. It's drifting into 2006 and it's bound to get a lot later (A2). Meanwhile they owe their License 6 customers an upgrade to justify the high cost, and they don't have one. Without Longhorn, their business software strategy, Project Green, is stalled (A4).

Microsoft's declared "Enemy #1", Linux, threatens international markets, including first world countries like Germany where they recently lost the city of Munich (14,000 computers) to IBM/SuSE bringing Linux and OpenOffice (A5). China is pretty much a write-off (A19) as is most of Southeast Asia and the Indian subcontinent. As Microsoft enforces licensing, many governments and businesses find they simply can't afford Microsoft products, and discover they really don't need them.

Even the U.S. Army is moving to Linux (A9), and Microsoft's share of the important Web Server market continues to decline (A13) while the open source Apache soars.

On top of all this, Microsoft's most dangerous competitors have made strong and well calculated moves that threaten their dominance even in U.S. markets.
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Enemies on a Roll

  • Novell once dominated small business and departmental networking. Many businesses are still running on Novell NetWare servers, and many more wish they hadn't been hoodwinked or bullied into moving to Windows NT/2000 servers, which are slower, less stable, less secure, and far more costly to administer.

    Novell today has many strong enterprise products like eDirectory (A6) and Web Services (A7, A8), against which Microsoft's products do not compare well. Problem is, these products have been, at least in perception, tied to NetWare, and NetWare has suffered for not being considered a great application platform. No more. Novell is moving all their products to the ever popular Linux platform.

    Putting its money where its mouth is, Novell bought the second most successful Linux publisher outright for the bargain price of $210 million. SuSE will now operate as a subsidiary of Novell and take full advantage of Novell's worldwide sales, dealer and support network. Novell will take full advantage of SuSE's leading Linux products.

    Industry commentary has been loud, and overwhelmingly positive, and has propelled Novell back into the technology headlines from which it has so long been absent (A14, A15, A16, A17, A18). Hooray for Novell!

    Novell also bought Ximian, a leading developer of desktop, messaging and .NET compatible products for Linux, including a leading replacement for Microsoft Exchange Server which supports Outlook clients.

    With a well known name and a reputation for rock solid products, Novell is now positioned to go toe to toe with Microsoft in many markets, and that includes the desktop, because SuSE, unlike Red Hat, is a strong supporter of desktop Linux in the enterprise.

    Further, IBM has promised to invest $50 Million in Novell as soon as the SuSE deal is complete, further solidifying its relationship with the combined company and its commitment to Linux. More on IBM below.
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  • Red Hat, the leading publisher of Linux and long time darling of Linux enthusiasts has abandoned the enthusiast and consumer markets completely to focus on the enterprise server market (A20). It has turned all its low end products over to a community organization, the Fedora Project, to which it will provide some support.

    As of November 2003, Red Hat Linux is still free, but to get it you have to sign up for at least a one year support and upgrade contract. After that you can decide for yourself whether to renew it or go it on your own. The lowest cost contract is about $350 per server, and they go up to several thousand depending on the version you buy and the degree of service you desire.

    The source code for Red Hat's products will remain available for free download as required by the GPL (General Public License), but having the source code is only a small part of organizing a distribution.

    Nothing would please Microsoft more than for Red Hat to spread its limited resources over the consumer and enthusiast markets, but this is now just a dream. Red Hat, which has never endorsed Linux on the desktop because it feared going up against Microsoft where Microsoft is strongest, now is sharply focused exactly where Microsoft is weakest, the enterprise server market.
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  • IBM has put its full weight behind marketing Linux on the server, over its full line of server products, from small Intel boxes all the way up to its zSeries mainframes. This has revitalized some of IBM's products, and they've invested serious cash in the further development of Linux.

    Using a zSeries an ISP (Internet Service Provider) can run thousands of iterations of Linux on a single box with a single management console. A new customers site can be set up and configured in a few minutes, rather than hours. Microsoft's solution would require a huge server farm, which may or may not cost less to buy, but administration costs would be far and away higher and reliability relatively poor.

    IBM has wisely chosen not to publish Linux itself, but has strategic relationships with the leading publishers, Red Hat and SuSE. IBM has a long running relationship with Novell, which is now greatly reinforced by Novell's purchase of SuSE and IBM's investment of $50 Million in Novell.

    One thing IBM has not done before now is endorse Linux on the desktop, preferring to support Windows instead of Linux or its own high quality OS/2 desktop environment. On 11-Nov-03, Sam Docknevich of IBM Global Services officially pronounced Linux "ready for the desktop", which means IBM Global Services is ready to support it (A21, A22).

    IBM itself expects to have 40,000 to 50,000 Linux desktops in place internally within a years time, and say they have a number of large clients ready to roll with Linux desktop deployments.

    This move can not help but anger Microsoft, which will be looking for vengeance, but lets face it, IBM's PC business is no longer either large enough or profitable enough to provide Microsoft the leverage it's accustomed to, and their vengeance capability is severely diminished by having been soundly convicted on antitrust charges.
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  • Apple's embrace of BSD Unix, the open source operating system on which its Macintosh OS X is built, has brought it from irrelevance back into the business mainstream. The strong similarity and compatibility between BSD and Linux has cast Apple as a "friend of Linux" in the eyes of many and made it far more acceptable to corporate IS (Information Systems) managers.

    A few years ago, Microsoft strong armed Apple into making Microsoft Internet Explorer the default Web browser for the Macintosh. Microsoft has since chosen to discontinue Internet Explorer and integrate its code into Longhorn. Apple has made Safari the default browser for OS X, a standards compliant browser based on KDE's Konqueror browser for Linux. Konqueror is similar to the Gecko rendering engine in the open source Mozilla browser.

    This move has forced some banks and other on-line businesses to start supporting standards compliant browsers instead of just Internet Explorer, which helps the cause of Linux and OS/2 users immeasurably.

    Apple still has one ax hanging over its head, Microsoft Office as the dominant office productivity suite for the Macintosh. Whenever Apple steps a little out of line, Microsoft threatens to discontinue Office for the Mac. Why does it exist in the first place? Unable to gain application market share in the DOS world, Microsoft originally developed Office for the Mac, then moved it to Windows.

    This threat will be progressively weakened as OpenOffice / StarOffice take more business market share. A version of OpenOffice currently runs on the Macintosh and a fully native version is in development. This will free Apple to become a more serious Microsoft competitor in the business marketplace.
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  • Sun Microsystems is the odd man out. It has an impressive array of powerful enemies: IBM, Microsoft, Intel, HP, Red Hat, Apple, Novell, and more. It has only a weakened Oracle as a friend, and Oracle too has made a "bet the company" move to Linux. Linux threatens many of Sun's traditional products as sharply as it threatens Microsoft.

    On the other hand, Linux may be Sun's salvation. The company is totally schizophrenic about this, denouncing Linux at one moment and supporting it the next. This is thought to reflect a serious power struggle within the company.

    Sun sponsors the leading competitor to Microsoft Office, OpenOffice, and publishes its own enhanced version, StarOffice. Sun has just announced its SuSE Linux based Java Desktop thin client environment (which, strangely, has almost nothing to do with Java).

    Then they turns around and denounces Linux as a toy unsuitable for enterprise computing, just as Microsoft once did. They've contributed anti-Linux money to SCO Group too.

    Sun's refusal to turn control of its Java programming language over to a standards body and to support an open source version of Java have turned many Linux developers against it. This slows the spread of Java and leaves Sun more vulnerable to Microsoft's .NET initiative and to various open source projects.

    The recent moves by Novell, SuSE, IBM and Red Hat may force Sun to do a major reevaluation and side with Linux and open source regardless of how many of its employees want to stay with Solaris. One thing is certain, they're going to have to make some major move soon or fade to irrelevance.
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SCO Group - A Fly in the Ointment?

But what about SCO Group and its $3 Billion lawsuit against IBM, its loud and continuous clamoring that Linux is an illegal rip-off of their Unix, and their endless threats to sue the pants off Linux users?

The only people who believe any of SCO Group's claims are investors, the very same investors who poured billions into a Dot.com bubble completely unsupported by any shred of viable business plan or hope of profitability in the next 1000 years.

There has been no slowing of Linux adoption, in fact it has accelerated since SCO provided it so much additional publicity. Nobody with a technical background and just about nobody with a legal background thinks they have a valid case either (and there's evidence that may include SCO Group's lawyers). See SCO - Death Without Dignity for links to legal and technical opinions.

Even if SCO Group did have a case, Linux is now so much bigger than SCO Group the problem would still go away, one way or another. When the flap first began, IBM could have bought SCO Group out from its petty cash box, and SCO was more than willing, but IBM thought so little of SCO Group's claims it chose to fire up the Big Blue Crushing Machine instead.

Interestingly, Novell, which sold the Unix licensing business to Santa Cruz Operation (the real SCO) which in turn sold it to SCO Group, retains certain rights and controls over the licensing, possibly enough control to completely void SCO Group's lawsuit against IBM regardless of any merits it might have or not have.. Novell's committment to Linux and purchase of SuSe certainly shows what they think of SCO Group's chances.

Meanwhile, Microsoft is pouring millions into SCO Group because its litigation is a last hope of restraining the Penguin. So far $8 million is confirmed, another multimillion block is confirmed but of unknown size, and a $50 million "investment" is suspected. This is all money lost, but Microsoft hopes it will be worth the cost.
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So what does this mean to your business?

What it means is that you'll have a whole lot more choices about how you structure your information systems, and you'll probably have to structure them in a much more flexible way to accommodate customers and vendors who have chosen to do it differently.

I realize many of you are not happy about having more choices, and more risk of making the wrong choice, but Microsoft isn't happy about its fading dreams of World Domination either. Longhorn is the one last hope for turning the tide of history, and it's going to be very late.

For middle managers and PHBs (Dilbert - Pointy Haired Bosses), Longhorn may still be the "safe choice", but whether it's the safe choice for the companies they work for is highly questionable. See my article Accounting Systems - the Future for a lot more on how Longhorn will impact your business.
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- Andrew Grygus

Additional Reading

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Change Log

  • Changed "IBM will endorse Linux desktop" to "IBM endorses Linux desktop" with addition of A12.
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©Andrew Grygus - Automation Access - www.aaxnet.com - aax@aaxnet.com
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