As personnel shrinkages go, SuSE's move was regrettable but not that big. The Linux world saw bigger job losses that week at TurboLinux and Linuxcare. What made the cutback notable was a quote attributed to SuSE president Volker Wiegand. The LinuxGram e-zine reported Wiegand as saying that Linux was "a victim of hype and irrational expectations." Another site, FairfaxIT, turned an interpretation of those comments into the headline "Linux doesn't work, SuSE chief admits".
Did Wiegand really say that? Could the leader of such a major Linux company -- the largest distribution in Germany and maybe Europe -- have soured on Linux so profoundly? Apparently not. The link to the original LinuxGram piece returns "Invalid article," and there's no mention of it on the LinuxGram home page anymore. Wiegand was quick to clarify what he had said on Linux Today,=20 calling FairfaxIT's analysis of his words "ridiculous."
One would think the case would have been closed at that point -- but it wasn't.
Reaction to Weigand's perceived comments took on a life of their own long after the retractions kicked in. All over the place, people used the opportunity to vent on the perceived futility of the current crop of Linux-related business models. Attacks, defenses, and counter-attacks were the order of the day; the mentions at Slashdot and Linux Today received far more than their share of talkbacks. But just as telling was the flurry of activity in local user group mailing lists such as the one I frequent.
This issue has certainly touched a nerve, and I can see why. Linux partisans are insistent that the success of Linux as a means of creating technology (let alone the technology itself) should not be measured by the fortunes of the various companies that exist to peddle it. Old school observers and critics such as Microsoft (see last week's column) point to size of the current Linux industry as an indicator that Linux isn't yet ready for mainstream commercial use.
In some senses, both sides are right.
The Linux industry, as most people know it, has yet to really prove it can make a buck. Let's face it -- there's not a whole lot of money to be made selling boxes of Linux on store shelves for $30 or so. You have to add value to the boxes so they don't look like rip-offs next to the free Linux downloads, but more often than not the added value is little more than commercial documentation. In this sense, then, the retail-box vendors are little more than glorified book publishers, which explains why Macmillan does so well in this genre.
The current darling of Linux revenue models is the one that ignores making money off the software itself and concentrates on support, consulting, and training. Companies such as Linuxcare and Linuxgruven exist for no other purpose, and every single Linux distribution vendor plays in this space. But I wonder whether this model is enough to sustain the growth needed to compete toe-to-toe with the big guys.
Companies such as Microsoft and Sun, who make money from hardware and software sales, offload most of these tasks to local VARs, who in turn have direct contact with end-users (except for the very largest users, which the big vendors handle directly). If the big Linux players want to be deeply involved in consulting, training, and support, they either need to partner with local VARs or compete directly with them.
Competing with the VARs, which have more intimate knowledge of end-users on a day-to-day basis, is difficult if not suicidal. Linux distributions, nice as they are, comprise only one part of the overall computer solution, and no current Linux distribution is equipped to take on all facets. Those companies that reach out to partners stand a better chance of success, even if their share of the revenue won't be as high as they'd like.
Companies such as Caldera, with its longtime cultivation of a VAR network, and Linuxcare, which franchised out its education program, are well-positioned to attack this market. As for Red Hat, their membership-based VAR revenue model is a little different; but at this stage of Linux's maturity, how many resellers can afford the $25,000 annual dues to join its club of service providers?
Linux companies are still scrambling for the right revenue model, knowing that it's a necessity in order to provide the long-term stability needed to comfort would-be end users and dull the anti-Linux hype. A number of novel approaches have evolved, and I'll talk about those next week. Until then, if you have any ideas about novel Linux revenue models, I'd love to hear them.
Tell me in the TalkBack below or in the ZDNet Linux Forum. Or write me directly at evan@starnix.com.
