September 22, 2014
 
 
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The Yin and Yang of Open Source Commerce - page 5

Introduction

  • November 1, 2005
  • By John Terpstra

Microsoft is the dominant technology supplier across the entire information technology spectrum. Microsoft has approximately 60% market share in the installed server market, and approximately 90% in the desktop operating system market. Other sources provide estimates that are higher.

The heart of Microsoft's business server technology centers around a distributed network directory service called Microsoft Active Directory. Comparing the network directory service-centric focus with the number of sites that really need it, the question should be asked if there is an excessive preoccupation with this technology compared with needs of the market as a whole. In other words, 0.18% of all customers may need a directory service, yet 100% of Microsoft's server technology is predicated upon using it. Why is this so?

Technicians are easily excited over new technologies, and the more complex the subject may be, the more interesting it is to the technician, and the more confounding the impact on the uninitiated. Has the IT world allowed itself to be derailed with needless complexity? Linux does not need a directory service to satisfy the needs of 99.8% of the market place. Why does Microsoft Windows need it? While that question was a digression, it is a vital question all the same.

Since Table 1 shows that 0.18% of all customers (the percentage of 500-plus employee companies) account for 7.67% of servers sold, it is understandable that there should be strong competition in the enterprise market segment. But that does not adequately answer why it should dominate IT practices to the exclusion of any significant market presence for Linux vendors outside of this segment. Most of the IT world's needs can be met with simple, non-complex IT solutions. Should we not first strive to take care of our bases, before attempting to build castles in the sky?

The world is preoccupied with the need for Linux to achieve a dominant share of the high-end server market as the acid-test of being enterprise-ready. The mental assertion being that when Linux reaches maturity in the enterprise market place (500+ users per company) it will magically be ready for the market as a whole. This patently ignores the fact that small sites do not have the same complexity of needs as exists in the enterprise market.

There are approximately 50,000 enterprise-class companies in the world. Of these, a number have complex information technology needs, but certainly not all. If IT press reports regarding successful IT businesses are to be believed, the complex needs of enterprise class companies determine development objectives for the major IT vendors for all market segments. In practice of course, companies such as IBM and HP do produce products that are carefully designed to meet the needs of specific market segments--witness for example the HP OfficeJet all-in-one office fax, printer, and scanner product line.

Red Hat Software, SuSE, Caldera, Novell, TurboLinux, LinuxCare, and their peers in 1998-2000 were all focused on gaining credibility in the enterprise market place. It is a sad reality that every major IT company has its primary focus in the same puddle. IBM, HP, Dell, Intel, AMD, and Gateway are well aware that the bulk of profitable business is derived from a more mundane source--the small to medium business (SMB) market and the lower end of the small to medium enterprise (SME) market.

If the enterprise market is the only one that can be profitable, it is to be expected that a concentration of competitive activity should be observed. Perhaps it is necessary to consider a few additional factors so that the wisdom of the present fiasco can be better understood. Perhaps we shall see that the most profitable market has not yet been tapped.

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