class=3D"middleText"> by Richard McCausland Who'd have= guessed? Linux-based PCs from Sweden's Microtel are jostling for shelf= space in Wal-Marts across the country against the likes of the Windows= XP-based Compaq Presario. Microtel may not be a household brand name= yet, but it’s not for lack of trying. The entry-level Sysmart 710,= with an 800MHz processor, 10GB hard drive, and 128MB of memory, sports an= eye-grabbing price tag of $199.98. That includes a user interface that= looks and feels like the ubiquitous Windows, and the ability to run select= Windows programs. What’s more, users can download over 1,300= programs--including more than fifty business applications--for only $99 a= year. Linux, an essentially free operating system developed in 1991= that has steadily accumulated applications support from a worldwide= development community linked via the Net, is out to make waves. Up against= the likes of Apple’s Mac OS and Unix and especially Windows, Linux is= targeting both the server environment--where it’s had its biggest= successes to date--and the desktop. Mid-market accounting software= developers aren’t just monitoring these trends; they’re= responding as well. For instance: • Accpac International, long= in the Linux vanguard with its Advantage Series on Linux, last month began= offering IBM’s DB2 Universal Database, which supports both Linux and= Windows, as a standard component within the Advantage line. The offering= includes three user licenses for DB2. Plans call for extending the= agreement to the open-source code Pro Series. • Accpac also has= certified its Advantage and Pro Series for deployment on Sun= Microsystems’ Linux-based line, including the new LX50 entry-level= server that starts at $2,795. • Last fall, Open Systems= formalized a joint marketing agreement with Lindon, Utah-based SCO Group= that will facilitate access by Open Systems VARs to the SCO Linux 4.0= solutions partners program. The combination makes sense since, for all of= Linux’ touted stability and cost effectiveness, "It’s not just= a matter of having an operating system solution; you need a business= solution as well" to succeed in the marketplace, contends product= development manager Dave Link. Plans call for the two companies to share= leads. • Appgen Business Software, an open-source developer= headquartered in Hauppauge, N.Y., is bundling the Linux-driven Toshiba= Magnia SG20 appliance server with its own MyBooks accounting package and a= wireless PC card, for a suggested price of $1,697. "Our VARs are grabbing= onto that," says Appgen chief technology officer Errol= Allaheerdi. • In the U.K., Best Software parent Sage Group and= IBM have struck an agreement for the Sage Line 500 accounting and business= management software to operate on the=20IBM -at-server iSeries running on= Linux. Also, Sage Line 500 is available for Linux on IBM Intel-based= servers. But that last deal is overseas. Here in the States, Windows= is effectively the "de facto standard" among small and medium-sized= businesses, with usage "in the high 90s percentile," according to= Best’s Irvine, Calif.-based Mid-Market Division president David= Butler. He says, "From a business person’s perspective,= everyone is thinking Windows," especially given an already hefty investment= in Windows-based applications software, not least Microsoft Office. Butler= notes, "If there’s not a compelling reason for mid-market companies= to change [technology infrastructure], then they don’t= change." Still, Best continues to monitor end-user perceptions with= regard to Linux, and "we would obviously move to meet customer needs"= should they begin to embrace Linux to a significant degree. Might= that happen? In its predictions for 2003, Framingham, Mass.-based market= research firm IDC says Linux will continue to gain ground against major= operating system competitor Unix. Along similar lines, Robert= Spencer, partner in Network Management Group in Gulf Breeze, Fla., is= predicting that this year, "Linux will come out of the background and enter= mainstream computing--read Ôdesktop’--in the United States." He= contends Linux is "already mainstream" in the rest of the world. A= shaky economy has people out scouting for more cost-effective systems, he= says. However, the "FUD factor"--fear, uncertainty, and doubt--is causing= people to think twice about moving away from a heavily entrenched Windows= environment. Also, he concedes Linux "is not really for everybody yet;= it’s not an easy solution to install. But it’s getting= better." Linux is making significant strides at positioning itself as= a desktop player, deemed necessary to becoming a viable Windows alternative= in the mid-market business environment. For example, Sun’s Linux= desktop solution, Mad Hatter, is slated for beta this spring and for= general availability this summer. cellpadding=3D"10" width=3D"50%" align=3D"right" bgcolor=3D"#fffef0"= border=3D"0">IDC: VARs Wary= of Linux Although viewing Linux as a growth opportunity,= value-added resellers are mostly taking a pass for now on this open-source= alternative to Windows, according to Framingham, Mass.-based market= research firm IDC. "Resellers are unsure of the profitability that a= partnership with a Linux distributor or a Linux-specific partnership with a= system vendor would bring," says Kevin Restivo, program manager for= IDC’s Software Strategic Alliances program. Only when distributors= and system vendors develop easier-to-use Linux operating systems will= resellers be more inclined to invest in Linux, suggests IDC in "Linux: A= Supplier’s Guide to Reseller Views," released last= year. However, Restivo cautions, "Vendors looking to push Linux into= the channel need to ensure they target those partners that can provide the= necessary high value-add activities to maximize investments in Linux, such= as the necessary consulting and integration= skills." | Sun already is marketing= StarOffice 6.0, which runs on multiple operating systems including its= proprietary Solaris, Windows, and Linux. The suite features word= processing, spreadsheet, presentation, graphics, and database capabilities.= A 25-user pack for small and medium enterprises goes for $1,500, while a= $75.95 retail version is targeted to the small office/home office= space. Among other developments, Hewlett Packard--parent of the= XP-powered Presario--last month began offering Red Hat Version 7.3= pre-installed on its HP xw line of personal workstations. And IBM has= extended Linux client support for Lotus iNotes Web Access. As for= Oakland, Calif.-based SuSE, it has brought out Pro-Office, priced at $24.95= and including the StarOffice Suite, the KDE 3.0.1 graphical user interface,= and SuSE Linux 8.0 patches. At $129, the Office Desktop gives users the= option of running Microsoft Office or StarOffice, and choosing between KDE= and Gnome interfaces. Other supported applications on Office Desktop= include Intuit’s Quicken. Significant= Growth "Linux is growing pretty significantly on the= [server] back-end, and it’s growing more and more on the [desktop]= front-end," says Accpac product management vice president Craig Downing. He= cites the launch of SuSE’s Office Desktop, with a port for running= Microsoft Office. That should help to win over business users for whom= "Microsoft Office was far too precious" to consider using alternatives such= as StarOffice. "More aggressive clients," because of the current= economic climate, are scrutinizing ways to save money, according to= Downing. A distributor might realize that staffers who pick-and-pack= require only a screen or two of data, and thereby conclude, "We don’t= want to be buying copies of XP or Office for people who don’t need= them. Why don’t we start mixing and matching?" Downing believes= the DB2 bundling deal with IBM, which takes in the DB2 Workgroup Edition= Server for both Linux and Windows, will help to further stimulate Linux= acceptance. With the first three DB2 licenses free, he estimates a company= could set up a five-user Linux environment for as little as $100 for the= additional two users. "For new clients looking at the Advantage Series,= it’s an attractive option," he says. Customers may of course= opt for Windows, and Accpac will continue to support the Pervasive.SQL= database, Downing stresses. But for now, mix-and-match is pretty much= the order of the day. "Most of the Linux servers that are going in have= Windows clients," acknowledges Scott Handy, director of Linux solutions= marketing for IBM, based in Somers, N.Y. But the emergence of an end-to-end= Linux environment is taking shape. "The applications vendors are the ones= who will bring the customers," he states. "They’re the ones with= solutions and who know the mid-market customers." That’s why IBM is= allying itself with companies like Accpac. It not only has the business= applications, it has an extensive sales channel. Linux may not represent a= sustainable business on its own, but there certainly are "incremental= opportunities" for resellers and consultants, says Handy. Moreover, Accpac= VARs will also recognize, "This is another way I can differentiate myself= from my Great Plains competitor." IBM is currently working with= Accpac to bring the channel up to speed on DB2, which Handy describes as= Accpac’s "database of choice." Herndon, Va.-based SystemLink= has already closed several Linux deals, including a "tremendous uptick" at= its London office. "There’s just so much more penetration in Europe,"= observes president David Beck, "and we’re forecasting that will= trickle out to the U.S. as people realize Linux is a less expensive [than= Windows] but very robust operating system." He’s enthusiastic= about the Accpac DB2 deal. "We’re going to be recommending it for= many of our new installations," says Beck. "This is going to make a= difference. It scales from low to very high end. We’re excited about= its future." Beck continues, "Linux is in a position to gain real= market share at the server level." He believes, though, that "the desktop= is down the road." Laura Marino Welsch Consulting in Irvine, Calif.,= is a Pro Series reseller. Owner Welsch has had perhaps two inquiries for= Linux, "but it’s important that it’s there," she says. She has= seen a gradual upward shift in recent years from five-to-ten-user system= implementations up to twenty users and more. That means costly software= licenses. But without IT staffing and a perceived dearth of Linux business= applications, middle-market firms will remain skittish. Linux’= gains at the desktop, as embodied by the Microtel incursion, will help to= turn that around, she predicts. "I’m seeing, as the desktop has been= reduced to a commodity item, customers are getting more comfortable= ordering stuff and having someone plug it in for them"--whatever the= operating system. Platform Portability As the= name would suggest, Shakopee, Minn.-based Open Systems embraces not only= open source code for its accounting applications, but also platform= portability (Linux, Windows, and various flavors of Unix) for the Open= Systems Accounting Software line. The Traverse product line runs only on= Microsoft. Being in the field, VARs have the best sense of what= functionality small businesses need to operate profitably, and can serve to= educate the customer base as to the merits of Linux. "It’s absolutely= critical that the reseller community gets behind this," says Link. In fact,= "That’s essential no matter what the operating system= is." Marketing vice president Mil Miketic adds, "The biggest issue= today with Linux is marketing. People don’t know there’s an= alternative to Microsoft. That’s only just happening." The word= must be getting out. Linux represents "a significant percentage" of OSAS= sales, according to Miketic. Of course, Open Systems benefits from selling= the Windows-based Traverse line as well. "That’s probably our key= advantage" against most mid-market accounting software rivals, says Link.= "We can mix [Windows and Linux solutions] on the same implementation. That= allows us to play in areas where some of our competitors= can’t." Appgen, meanwhile, is getting a positive response from= the channel for its Magnia/MyBooks bundle. That’s crucial, since "in= the small business market, we find it’s the VARs who are doing=20a= tremendous job of pushing Linux," says Allaheerdi. Appgen has its= entire product line running on Linux, Windows, Mac OS X, SCO Unix,= IBM’s AIX, and other Unix flavors. Products include MyBooks= accounting and a Custom Suite with general business= applications. Customers are responding as well. "We’re making a= lot of sales to people interested in an open environment and in choice,= although initially they’re running their systems on Windows," he= says. They recognize, however, that as their businesses grow, they may want= or even need to mix platforms. Business Network Solutions in Jackson,= Miss., an Appgen reseller, has many clients running Linux as a back-office= server while keeping Windows on the desktop. Others are "running Linux end= to end"--such as one client who runs a chain of funeral homes with fourteen= desktops and one server, all Linux-based. Clients may care to some degree= about operating systems, but first and foremost, "they want to get their= job done," notes owner Ben Duncan. Linux, alone or in tandem with Windows,= lets them do that. Still, some vendors are adopting more of a= wait-and-see attitude. Softline, an open source advocate via its= Visual AccountMate line, continues to keep Linux "on our drawing board."= David Dierke, executive vice president of sales for Softline North America,= based in Novato, Calif., explains, "The market is still pretty dominant= Microsoft," and that won’t be changing any time soon, he= suggests. Because of the troubled economy, within the mid-market "the= days of having one or two IT guys on staff are over," says Dierke, so users= aren’t likely to tangle with the complexities of Linux. "They want a= pretty stable platform"--meaning Windows, for which there is an existing= massive library of business application packages and functional= extensions. In-House Loyalties Unsurprisingly,= Microsoft Business Solutions, whose product lines encompass Great Plains,= Solomon, Navision, and Axapta, is staunchly pro-Windows. There are, of= course, initiatives such as Microsoft Services for Unix 3.0 to provide= clients with cross-platform support. But regarding Linux, that remains= largely a higher-end server player. "We don’t see much out there in= terms of the desktop," notes Franc Camara, director of business strategies= for Microsoft worldwide, small and medium businesses. height=3D"213" alt=3D"" src=3D"../../ewebeditpro2/upload/wsl.gif"= width=3D"191" align=3D"left" border=3D"0" />"Honestly, there’s a lot= more noise than presence," he says. He further suggests that some of the= noise is off the mark, as when contrasts are drawn between "free" Linux and= Windows 2000 without taking into consideration related hardware,= deployment, testing, and support. "All that is cost," states= Camara.
In a study sponsored by Microsoft but conducted by IDC,= "Windows 2000 Versus Linux in Enterprise Computing," the research firm= concludes that Windows 2000 offers lower total cost than Linux in four of= five workloads common to corporate IT environments: network infrastructure,= print serving, file serving, and security applications. Linux won the= decision in Web serving. Gregory Price, CPA, director of consulting= solutions for PKF of Texas, a Houston-based IT consulting firm and Navision= Solution Center, says his mid-market clientele typically don’t have a= strong technical person on staff, "so they pretty much want to stay in the= mainstream." That means Microsoft. "I’ve never had one person ask me= about Linux," he says. He believes Linux will have some measure of= success among middle-market companies in a hosting environment, where IT= managers can worry about the technology and small business owners can= continue to concentrate on their businesses. He cites San Antonio,= Texas.-based Rackspace Managed Hosting, a Red Hat strategic partner that= provides clients with the servers, software, bandwidth, and management= needed to run their hosted applications. These may run on Linux, Windows= 2000, Solaris, and Unix-based, open-source BSD servers. Also going= the hosting route is Boston-based OpenAir, which provides Web-native,= Linux-based professional services automation software that includes time= and expense tracking; project estimating, accounting, and management;= resource planning; knowledge management; purchase orders; billing; and= business intelligence. Marketing vice president Jeff Hunt has no= misgivings about Linux. "The trends are so prevalent about the success open= source is having," he says. "Right now it’s risky to recommend [to= customers] any kind of closed, proprietary system since that potentially= could exclude them from new applications and services that are cropping= up." By offering its Open Air Complete PSA software on a Linux= platform, the vendor is able to price its online services "significantly= below" comparable services from rivals, according to Hunt. Low price= and easy modification are two key forces behind Linux’ spreading= acceptance. Other factors are also at work. In the view of= SystemLink’s Beck, "The initial spin people put on Linux was the open= source. But I don’t think that’s what’s driving interest.= In the middle market what’s driving interest is choice--that is, a= choice other than Microsoft."
Richard McCausland is Senior= Editor of Accounting Technology and can be reached at href=3D"mailto:Richard.McCausland-at-amgpubs.com">Richard.McCausland-at-amgpu= bs.com . |