The Year of Desktop Linux

We caution any investor from getting too enthusiastic about the impact of the “new new” thing. The impact of inertia, and the sophistication of technological solutions, often overwhelms the apparent benefit of the new solution. The new solution often either takes much, much longer to have an impact, or it never really takes hold.
We advise looking for companies with significant market share and a proven ability to defend their position with innovation and continual enhancements. In fact, we think that the rise of consumer appliances such as laptops and cell phones may favor the most established large cap companies, despite their proprietary devices and solutions.
We think that open source computing offers an excellent example as to the limited impact on market leaders of disruptive technologies. Open source computing remains one of the more interesting potentialities in the information technology market. Unfortunately, it has remained a potentiality rather than a major force in several markets despite ebullient prognostications.
At the turn of the century, we thought that Linux could make significant inroads on the desktop software market and erode Microsoft’s dominance. Back in 2001, we noted in this column that Linux had failed to gain share in the desktop/laptop market, which we attributed to the dominance of Microsoft Office and the lack of complete hardware compatibility. In 2002, we loaded a copy of Red Hat 8.0 with a new user interface and a number of software applications at home. While it had decent hardware compatibility, we still had problems getting the sound card to work. As a “newbie,” we also were frustrated at the limited customization options of the interface using just a mouse to change the options.
Based on this limited experience, we didn’t think that the impact of Linux on the desktop would be significant at first; however, we thought that the sophistication of this open source solution would increase and its relative attractiveness would rise over time. In short, we thought that the gap between Microsoft Windows would diminish and that Linux’s market share on the desktop would rise.
We had no explicit timeframe based on any detailed analyses, but we thought that Linux’s desktop impact could be felt in three to five years, mostly via a continuing reduction to Microsoft’s growth rate in revenues. The selection of Linux as a desktop solution in high profile organizations such as the Munich city government lent some credence to this thought; governments and emerging markets should have great incentives to shift to a low cost alternative. Market research firms supported this thesis and were predicting significant desktop share gains for Linux.
Whoops. Over the past five to six years, we have probably been right in terms of the closing of the gap between the two desktop solutions. The desktop interface has gone through several generations. OpenOffice seems to be a perfectly viable office productivity suite, and there are many other effective applications available. However, Linux still suffers from modest hardware incompatibilities and a far more limited selection of desktop applications. These failings are evidenced by the perennial failure of the “Year of Desktop Linux” to appear. Market shares seem mired in the low single digits.
More important, perhaps, is the attitude of the development community towards unsophisticated users. In 2004, we read an excellent article by Eric Raymond entitled “The Luxury of Ignorance: An Open-Source Horror Story.” His argument that the Linux development community fails to consider the user’s point of view struck a chord with us. In it, he effectively demonstrated how an archetypal Aunt Tillie would run screaming from her attempt to use Linux. The presence of hundreds of different Linux distributions and at least two different graphical user interfaces seems to support this; the software seems to be developer/enthusiast-oriented rather than mainstream user-oriented.
In the meantime, proprietary operating systems have prospered. The real gains in the desktop have been by Apple, a premium-priced, proprietary vendor. Microsoft has not failed to prosper, even in emerging markets, despite the advent of an overhauled operating system in Vista and a radically different interface in Office 2007. In the smartphone market, Windows Mobile, the Blackberry and Nokia’s Symbian dominate. Apple’s iPhone is the latest splash and is a closed system. Despite all the hoopla over Google’s Android open source software stack, we are skeptical that open source will make real inroads into the smartphone market.
So where does this leave us regarding the Year of the Desktop Linux? Well, in about three to five years we think that… seriously, we do think that open source can play a significant role in many areas, but if history is a guide, well-packaged complete solutions should continue to dominate the consumer technology market.