Walmart versus Microsoft


Sun Microsystems, the developers of the cross-platform Java programming language and the Solaris operating system, is considering Walmart as the main supplier of Sun's Linux-based Java Desktop System. This will be Walmart's third Linux desktop offering, joining in dirt cheap Lindows and SuSE Linux offerings.

This is actually a rather important business story, because, in a sense, what you have is the world's largest retailer, Walmart, taking on the world's largest software vendor, Microsoft. Because, when reduced to bare essentials, that's what Walmart's embrace of Linux really means, and also why it is potentially significant. Here we have two corporate giants squaring off against one another. If I was Microsoft, Walmart's flirtation with desktop Linux would concern me almost as much as IBM's full embrace of the Open Source OS.

It goes without saying, of course, that the threat does not impose any imminent threat to Microsoft. Walmart still primarily sells computers with Windows XP. And although the cheap Lindows offerings have done better than expected, the expectations were so low to begin with that even a marginal success with have exceeded them. Nonetheless, it is easy to understand Walmart's interest in desktop Linux. Walmart's business model is based on using every possible means to undersell their competition. Linux and other Open Source software allow Walmart to cut computer costs. Every PC sold with Windows XP pre-installed has about a $70 surcharge. Lindows probably has about $30 surcharge. Walmart also sells computers without operating systems, starting at $158. It's cheapest Lindows offering is $198.

But is Linux, in its Lindows incarnation, ready for the mass market? Well, that depends. As an OS, Lindows, which is basically a version of Linux dressed up to look like Windows, is very dependable as far as stability is concerned. You can fire up a Linux computer and keep it running without a reboot for months. The OS just works without the kind of hassles and annoyances associated with Windows. And there are literally thousands of programs that run on it, all of which can be downloaded off the internet for free. It's also relatively free of viruses.

What's the catch? Well, first of all, there's not a whole lot of advanced desktop applications, nothing comparable, for example, to Photoshop, Illustrator, Frontpage, Dreamweaver, MS Office, Final Cut Pro, DVDStudio, or the like. And a lot of the software that does run on Linux is poorly documented are still in the process of being developed. Hardware support remains spotty and treacherous. Nor is ease of use one of Linux's strengths. Configuration can require a degree of expertise that most computer users simply don't have. But the biggest weakness, as PC mag's John Dvorak has noted, is lack of support for commercial games. Let's face it: nowadays, that 's principle reason why people have PCs in the home: to play games on them. There are, to be sure, hundreds of games available for Linux, many of them patterned after the commercial games and all of them free. But none of them can quite match the glitzy professionalism of the commercial games.

So why is Walmart offering PCs with Linux? For the upside further down the road. And also because it gives consumers choice. For those on budget who want a computer to surf the internet, read their email, track their finances, and word processing, a Linux-based computer might make sense. Unlike Microsoft, Walmart survives primarily by serving its customers. In any case, a mass market retailer cannot use copyright laws to trap its customers into using its offerings. That's possible in the world of proprietary software. It is what has made Bill Gates the richest man in the world. But in retail, it would be a disastrous business model.





Posted: Tue - March 30, 2004 at 08:11 PM          

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