Yes, The VAR Guy knows Bill Gates has left Microsoft. But now that Billionaire Bill is gone, IBM and Canonical are trying to destroy the very software empire he built. Specifically, IBM, Canonical and Virtual Bridges have launched a low-cost, virtualized Ubuntu Linux build for big — really big — corporate customers. No, this won’t kill Microsoft. But the IBM move is a big-time attack on Windows and Office. Here’s the scoop, along with the implications for Microsoft, Novell and Red Hat.
The virtualized Ubuntu release — complete with applications — initially targets IBM’s financial services and government customers. And it costs a scant $49.00 (US) per user for 1,000-user deployments. Prices fall further if customers buy in greater bulk.
Moves like this have got to drive the folks in Redmond crazy. The old per-seat PC Windows tax is on its death bed, folks.
- In the consumer market, low-cost Ubuntu Netbooks (from Dell and others) are putting the squeeze on Microsoft Windows margins.
- In the corporate market, thin clients from folks like Wyse and Novell are selling fast, and Novell’ year-over-year Linux sales are up more than 30 percent.
- And now again in the corporate market, IBM is changing the rules of the game by placing all the horsepower on servers that deliver virtualized Ubuntu to corporate deskops.
And it’s not just an attack on Windows. Remember, the $49.00 price point also includes Lotus Symphony productivity applications that compete with Microsoft Office.
Will all businesses switch to virtual and physical Linux desktops? Certainly not. But some will certainly give IBM’s pitch a try. Windows’ desktop market share recently fell below the 90% mark. This IBM move, with an assist from Canonical and Virtual Bridges, could inspire more vendors and customers to breakaway from Microsoft.
Are we looking at 85% market share for Microsoft Windows within three years? The VAR Guy sure thinks so. And even Red Hat, our resident blogger believes, must be starting to wonder if they should have found more aggressive ways to promote Linux desktops.
One caveat: The VAR Guy would love to know if IBM, Canonical and Virtual Bridges will allow solutions providers to offer this new, virtualized Ubuntu suite through the channel.
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This is just the time to do this. I hope people who make decisions give this solution some good pondering time.
Vadim: Imagine the white boards in Redmond tonight, with all the pricing models getting erased and re-written over and over again.
How do you compete with a complete, virtualized solution — all the system software, all the applications — for $49 or less per seat? Oh, and no need to push patches and security fixes out to desktops over and over again.
IBM is going into financial services customers — the folks who can’t afford new Windows PCs right now — and the government sector with this solution. Big, big, big business move.
Interesting, Joe, but two data points:
1. According to PCworld, IBM wants $249 a seat, not $49 a seat, if you actually want your enterprise users to do anything useful like collaborate. That’s about an Office 2007 price point. The big play is the virtualization play; it is debatable how well Microsoft can match the IBM (and Red Hat) story but time will tell
2. As for Novell’s Linux sales, go check who’s buying all those additional copies of Suse; I think the ship-to address is Redmond, WA
There’s also a channel story here in that I think the these are MSRP prices. There was an interesting story in Bweek recently about how Microsoft lost a deal to Google in this space but digging down into it, it appeared to be totally a Microsoft solution-provider/dealer trying to gouge (sp.?) the guy.
– Dennis
@ Dennis:
Actually, no, it starts at $49.
http://blogs.computerworld.com/ubuntu_ibm_choice_corporate_linux_desktop
Ubuntu is a great OS, I learned about it a couple years ago by watching a few demos in youtube. I installed in on my laptop and virtualized windows xp for applications that were not compatible with linux. Fortunately, I found out there were TONS of great applications working in Linux that could very easily substitute windows applications. Now, I’m a true Ubuntu Linux Fanboy. Turns out companies can save money for what is, in many ways, a superior OS.
Roberto S: Two quick observations for you.
1. The VAR Guy tries not to hype ubuntu, but he is writing this comment from a System76 notebook running Ubuntu. Very sweet.
2. If you’re really into Ubuntu, check out The VAR Guy’s sister site: http://www.WorksWithU.com — the independent guide to Ubuntu.
Happy Holidays.
Roberto, what are you using to successfully virtuale Windows XP??
I’ve used Win4Lin but found it a bit shaky.
TIA.
TechPro57: I’ve been running XP in VirtualBox on Ubuntu since version 1.5 (before Sun bought it). There are a few quirks with certain programs and hardware, but overall it works nice, at least for what little I need.
What else can people do with quad-core CPUs and 4 gB or more of RAM? It makes very little sense to have that kind of stuff idling all over the building. It is far better to use the new technology to make very low-powered client systems (less heat/noise/dust/maintenance) and to put the power in a server room where it will not bother anyone or be bothered by them. The system administration workload goes way down, too. I have been using thin clients for years and find it ideal for any user not doing full-screen video, which is most of us, I think.
The same technology that permits quad-core CPUs and gigabyte memory sticks permits very low-powered CPUs that can be fanless and fit in a tiny box. No need for ATX any longer except perhaps for multimedia machines. Browsing/word-processing is what a lot of us do. This is a major market shift. It is happening along with the netbook, the emergence of BRIC in IT, and the VISTA disaster (or miracle, depending on your point of view). M$ has fallen into the tar pit it made and cannot adapt to the changing conditions in the market. Perhaps they do not want to be a monopoly any longer because they cannot get away with the dirty tricks any longer.
VAR Guy, I like you site and commentary but you might want to remove the comma in the link in comment 6 to your Ubuntu site http://www.workswithu.com/
tctc: The VAR Guy fixed the link, and thanks you for the correction.
Maybe we must to left behind the so radical thoug about a 100% Linux World or 100% AIX World.
Linux has demostrated to be a VERY useful, robust, reliable and afordable Operative System and to be another option on x386 platforms.
I am a Very Big Fan of the Penguin. I believe its time to arrive more agresively to the desktop.
Put someone on a pedestal and sooner or later they will fall from grace. The same is true with any company or corporate entity. All the big names have had their turn at the top. Microsoft has had it’s day. People and companies can no longer afford Windows and Office. They are looking around and finding alternatives.
Personally I predict Windows 7 will be just as big if not an even bigger flop than Windows Vista and Microsofts desktop share will be cut to less than 80% in three years if not lower unless they do something really drastic to halt the decline. Like sack the board for example and adopt a UNIX architecture.
I also predict their share of the netbook and note book markets to be even lower and things aren’t looking too good in the smart-phone arena either. The Open Handset Alliance has just scooped up a whole new batch of supports including some pretty big names like Sony Ericsson and Vodafone. And of course Microsoft already faces intense competition in the games console market.
Microsoft are being attacked on all fronts and their response thus far, aside from a few meaningless price cuts, has largely been to try and weather the storm with a coat of paint splashed over Windows Vista. The on-line “Cloud” versions of Word and Excel won’t even allow home users to edit documents. What’s the point in that?
What’s on offer there is woefully inadequate and will hardly get any oil burning in Redmond beyond 5pm. IBM have tried this before and they have failed.
I dont understand why people hate MS, I use Linux, but I think we should recognize MS contribution to software industry. And MS creates jobs, so if MS is gone, a lot of people will remain without a job. Competition is good but Im tired to see this hate against Microsoft. If you dont like it, then just dont use it.
Dan: Well said.