December 22, 2000

Why IBM's Linux push is good for smaller Linux hardware manufacturers

Author: JT Smith

- by Robin Miller -
I co-founded one of the first "sedan services" in Maryland, and my experience in that business makes me believe that Linux involvement by hardware heavyweights like IBM, Compaq, Dell, and Hewlett-Packard is the best thing that could possibly happen to smaller Linux hardware manufacturers.
Before I go on, I must remind you that NewsForge is owned by VA Linux, which is most certainly a "smaller Linux hardware manufacturer." I must also tell you that what I say here neither has anything to do with any official VA corporate position, nor do we *ever* discuss material on NewsForge with VA corporate people before we publish it. The opinions below are my own, period. (If you disagree with them, fine. Don't blame VA, blame me personally.)

Having gotten that out of the way, let's go back to the time, over a decade back, when two partners and I started On-Time Sedan Service in Baltimore, MD. We were all driving cabs at the time and wanted to better ourselves. The Public Service Commission had decided to allow small operators to obtain licenses to run door-to-door transportation services that did not use taxi meters to determine passenger charges, but could quote exact fares in advance of the trip. The only major operating restriction placed on the new "sedan services" was that we could not pick up passengers who hailed us on the street; all our business was supposed to come from phone-arranged appointments.

We had no problem with operating solely by pre-arrangement. We liked it that way, since our primary objective was to secure stable corporate accounts rather than individual customers. But the one question we were asked by potential corporate customers over and over during our first year in business, was, "How are you different from a cab, and why should we use your service instead of calling a taxi?"

We were able to answer that question well enough that we grew and prospered; we had friends in New York who had operated livery sedan companies for years, who helped us bring this concept to Baltimore, where it was still unfamiliar. By the time my partners and I broke up the company and went separate our ways a little over two years later, we had grown our fleet from three mid-range cars to six luxury sedans, three stretch limousines, and a 12-passenger van, all in daily service, and our greatest problem had gone from getting new customers to finding competent help.

But at first, along with the general worry about getting enough business every month to pay our bills (we were 100% self-financed), we worried ourselves half to death about competition. What if larger companies -- like Yellow Cab or Royal Cab -- started their own sedan services?

And the cab companies all did go into the sedan service business almost immediately, and so did many other entrepreneurs who had more startup capital then our little band. But we soon noticed that the new competition wasn't hurting us a bit!

Our larger competitors, all of whom had advertising and promotion budgets orders of magnitude larger than ours, did more to promote the concept of flat-rate sedan service transportation than we ever could have on our own.

By the end of our first year in business, On-Time Sedan Service was no longer trying to sell the sedan service concept, but merely helping potential customers decide which sedan service to patronize. The amount of effort it took us to land a corporate transportation account had effectively been cut in half, thanks to our competition.

Now let's come back to the present, and talk about Linux hardware again. Instead of using VA as an example, I'll use my friend Joe, who is half of a two-man Baltimore company called AmNet that builds custom Linux systems.

A few years ago, Joe spent much of his sales effort on attempts to explain why potential customers should use Linux before he even tried to tell them why they should buy from AmNet. Then VA and other Linux hardware makers started to make big splashes for Linux, and Joe started to do less Linux evangelizing and more actual selling. Now IBM, HP, Dell and Compaq, not to mention VA, Penguin Computing, IndyBox andd a bunch of other "pure" Linux hardware builders, all promote Linux like mad, and Joe hardly ever hears "What's a Linux?" or "Why should I use Linux instead of Windows?" any more.

Yes, a rising Linux tide lifts all boats, and large ships make waves big enough to swamp small boats, but skillfully-handled small boats can catch and surf the waves created by the big ships. Those ship-created waves are plenty big enough to give good surfing to dozens or hundreds of small boats, too, with tiny dinghies like AmNet riding wavelets while more robust vessels like VA catch the bow waves created by the giants, often using those bow waves (which are full of dangerous turbulence and can only be ridden effectively by master seamen) to stay slightly ahead of the ships that created them.

I'm sure marketing people for all the pure Linux hardware manufacturers had a moment or two of fear when they heard that IBM was not only going to dabble in the Linux marketplace but was going to build up a full head of Open Source steam and ram their Linux throttles to "full ahead." But that fear was a shallow one, and it will be washed away as soon as the pure Linux companies learn that each of them has strengths and expertise that others don't, and learns how best to capitalize on those strengths, the same way I learned that my personal strength in the non-cab transportation business was driving stretch limos with maximum smoothness (not speed), and doing the "showman" part of the limo act that is prized at weddings and other ceremonial events, rather than rushing from one short ride to another, which was my original sedan service partners' favorite part of our operation.

Sometimes it's necessary to take a moment to reflect not only on the marketplace you're in and where it's going, but also on your (or your company's) position in that marketplace. In the case of the Linux hardware marketplace right now, which is growing rapidly and likely to grow even more rapidly in the near future (in large part because IBM and other giants are entering it so strongly), there are so many possibilities opening up for everyone from the smallest clonebuilders to the largest makers of specialized server hardware hardware and storage devices that no one in the Linux hardware business should be worried about finding an appropriate niche for themselves.

If anything, they should all they should spend the majority of their "worry time" wondering how they are going to cope with a potentially huge increase in the number of sales inquiries -- and eventually orders -- they are likely to get as a result of IBM's heavily-publicized embrace of Linux and Open Source software.

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