March 21, 2006

Carmony: Linux desktop demand inching into retail channel

Author: Jay Lyman

Linspire President Kevin Carmony doesn't want Dell selling and promoting Linux desktops -- at least not yet.

Carmony -- whose company's Linux operating system has found its way onto PCs from retailers Sears.com, Kmart.com, Walmart.com, Amazon.com, and others -- says Linux's move to the desktop centers on the alignment of three keys: technology, demand, and distribution channel.

"All three need to kind of keep pace with each other," Carmony said in an interview. "I don't want Dell to do this prematurely. It takes a lot to move their needle."

Carmony explained that if Dell, recently called out again for its half-hearted desktop Linux efforts, were to undertake a major Linux sales and promotion campaign, the expected return would be huge -- and any disappointment would bring another five years of limited, low-light Linux offerings from the high-volume PC giant.

"They don't create demand, they only fulfill it," Carmony says. "I don't want me to be the one pressing Dell [for Linux offerings], I want demand."

Inching into retail online

Those pushing for more desktop Linux offerings sometimes complain that Linux is not available in retail stores, and thus is not something that consumers can touch and investigate. However, online sales of Linux machines through major retailers' Web sites is the natural launching pad for the newer operating system, Carmony says.

When online distributors and retailers are happy with their online sales, then they will consider pushing the merchandise into stores, Carmony says, hinting at upcoming major retail deals.

Where Linux PCs and notebooks are for sale in stores today it is typically as a low-cost item, though it is among the most popular items at Fry's Electronics, according to Carmony.

And while Fry's does not provide Linux expertise on its store floor, Carmony says the in-store displays and Linux-savvy staff at smaller retailer Micro Center -- an initiative launched last summer -- have been a success.

"It's not so much volume," Carmony says, comparing Fry's and Micro Center. "With Micro Center, there's a very different trend we've noticed. When [customers] turn it on, there's much higher registration from Micro Center than from Fry's by I'd say three or four to one."

Carmony explains that while a typical Fry's customer may buy the budget, $200 Linspire PC "for spare parts" or even with the intention of installing Windows, the Micro Center customers know they are getting Linux, want to get Linux, and become Linux users.

On store shelves now

Micro Center's PowerSpec Brand Manager Jay Price says the 19-store national chain has been pleased with the success of its PowerSpec Desktop Linspire models since the store introduced Linux sections and staff last year. "With Micro Center's dedicated in-store Linspire displays and our highly trained sales staff, we have been able to meet the needs of our customers looking for a viable alternative operating system," Price says.

All of the Micro Centers stores feature the Linux section and staff, but the Linux flavor is limited to Linspire. As for application software, Price says, "We suspect that advanced Linux users would most likely prefer to purchase [or download] standalone Linux software to load on their own." Price describes the typical Micro Center Linux customer as a consumer looking to add another computer to the household. "In some cases, they are being used as the primary operating system," he says. "In many cases, they are being used as an alternative operating system, or as a second or third PC within a household. The demand for these PCs continues to gain momentum as they gain mainstream acceptance."

Major players mindful

Although he is glad that Dell is not jumping into Linux ahead of demand, Carmony says Dell and all of the other original equipment manufacturers (OEM) are contemplating their Linux plans, including talks with Linspire and likely other Linux sellers and organizations. "There's not a single OEM that's not looking at it," he says. "It's not a matter of if with these guys, it's a matter of when."

"Within the next 18 months, you will see Dell, Hewlett-Packard, Wal-Mart, and all the big guys at the retail table, offering something Linux," Carmony predicts. "Those dominoes are going to fall."

Carmony says that while Linux desktop software may not be ready for a mass supplier such as Dell, the keys of better technology, increasing demand, and a functional distribution channel are in step as more Linux hits the mainstream. "Demand is right on par for where it's hitting the channel, so we're not ahead of ourselves."

Carmony also says the success of the Linux desktop toe-dipping is a good basis for more mainstream sales of Linux. "The most encouraging thing I can say is that people who are selling, without exception, are all really happy," he says. "At the end of the day, that's what you want."

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