[Linux-aus] Hardware resellers of the world, rejoice!

Con Zymaris conz at cyber.com.au
Fri May 7 09:04:01 UTC 2004

On Thu, May 06, 2004 at 07:25:44AM +0000, Jon Hall wrote:
> >3. To stimulate consumer demand for more
> >sophisticated hardware". (Point 3 is *definitely* his precise phrase).
> Note he said "more sophisticated hardware", and not "more expensive hardware".
> For those of you who remember the days of storing data on audio cassette tapes, I think
> we all appreciate the large, fast disk drives of today.  And you gamers would
> definitely be disappointed in the action delivered by some of the first video cards.
> These might have come into being without the large desktop market of today, but it would have
> taken a *lot* longer.
> I don't give Mr. Gates credit very often, but his single-sighted belief in the
> desktop market has driven much of the commodity prices we see today.  Of course
> the music industry (CD-ROMS) and the television industry (HDTV) have also driven
> it.  And we will never know what history would have been generated if Mr. Gates
> had not been there, but history is as history was, and few would deny that
> Microsoft helped to drive that market.

Microsoft's business model is to drive hardware prices into the dust, yoke 
all the hardware suppliers to Microsoft, and make the lions share of any 
resultant profit that can indeed be made from computers. 

Linux is the only means by which that hardware vendor community can indeed
fight back. For anyone interested, here's a missive from one of last year's
AUUGN editorials on this topic.

- - - - - - - - - - - - - 

AUUG Editorial, March 2003

To those of us ensconced within the technical realms of our industry, 
economics, or the 'dismal science' as it's often belittled, nary merits a 
moment's thought during a day filled with debugging shell-scripts and 
scanning log files. However, as I'd like to demonstrate briefly, this is 
often to our detriment in understanding a large part of what makes us use 
the tools we use and what shapes the jobs we will be pursuing in years to 

The IT industry is quickly reaching a maturation point whereby most of the 
hardware and most of the system-software and tool stacks will be 
commodities. Some of this works in the Unix community's favour, some does 
not. Here's the upside: 23 years ago, after an aborted mission to meet with 
DRI's Gary Kildall, (of CP/M fame) IBM rolled up to a meeting with Bill 
Gates to discuss the licencing of MS Basic for IBM's forthcoming entry into 
the PC industry. Gates, upon hearing that IBM was snubbed by DRI, offered a 
replacement OS for the new IBM PC. Gates & Allen then legally purloined 
Q-DOS (Quick and Dirty Operating System) from Tim Patterson of Seattle 
Computer Products, for the bargain price of $60,000. 

With this acquisition, Microsoft was able to build an OS hegemony wherein 
Microsoft increasingly provided the Intellectual Product while the hardware 
stack was abstracted to near irrelevancy. It mattered not from whom you 
purchased your underlying hardware, as long as you purchase your OS from 
Microsoft. This process of hardware stack commoditisation has been 
relentless, and greatly benefits Microsoft as much as it usurps all 
hardware vendors belabouring under its yoke. How does this benefit our 
community? Simple, Linux and Open Source Unix platforms and tools are now 
doing to Microsoft's Intellectual Product stack what it had in turn done to 
the hardware. Linux et al are completely commoditising the system software 
and tools stacks. With time, this will likely have two major effects: it 
may squeeze Microsoft out of the mainstream OS platforms space (as too 
expensive) and provide respite to the hardware fraternity by allowing them 
to build more esoteric and specialised hardware systems, but which can 
still interoperate and run the same apps, as they all rely on the same core 
Open Source Unix system and tool stacks. 

The first effect of economic commoditisation of the software stack  looks 
like becoming a reality. A recent  IDC report claims that this year, 
Microsoft will see its first real reduction in platform market domination, 
ever. The second effect is also becoming reality; numerous, formerly niche, 
players are now bringing out capable entries in specific market segments 
and winning business due to their adoption of Open Source Unix system and 
tool stacks. Two that I've seen introduced in recent months include Apple's 
X-Serve and SGI's Altix3000. Bull market for our sector!

Con Zymaris <conz at cyber.com.au> Level 4, 10 Queen St, Melbourne, Australia 
Cybersource: Australia's Leading Linux and Open Source Solutions Company 
Web: http://www.cyber.com.au/  Phone: 03 9621 2377   Fax: 03 9621 2477

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