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How Do Small GNU/Linux PC Vendors Survive?
garananda asks: "In spite of being one of the very few sources for customized PC laptops pre-installed with various flavors of GNU/Linux, Qli Linux Computers is closed as of March 15th 2004 after serving the community for six years (thanks for all of your hard work). It is becoming easier to get Linux computers from some of the big vendors, but usually this means no hardware choices and no choice of preferred GNU/Linux distribution. Is any small company providing this service and succeeding (lots of hardware options for desktops, custom laptop options, multiple GNU/Linux distributions, and no mandatory 'Microsoft tax')? How do they do it? Given the low margins in the PC market and given the variance of component quality and component vendor reliability/prices, how would _you_ do it?" When one asks "How does one sell Linux", it's only fair to point out what you don't do. Beyond that, what are other recommendations do you have for putting Linux out there for consumers, in the hopes it will sell your hardware?
There's no money in it these days...
This GNU/Linux thing. Is that anything like real Linux?
I would expect smaller vendors to survive by providing services outside of the "buy the cheapest white box from me". By providing excellent customer service, training, handholding, integration, something - you can provide a high margin service that will keep your business running.
If you think you can compete against Dell on price, you will get yourself in trouble - if you can help the Small Office/Home Office market (that isn't that well served by Dell - especially at the low tech end) by providing networking/setup services and the like - you might be able to carve out a niche.
By the way - as a small vendor, let your customers buy what they want/need. Be snobish and don't sell Windows even when your customers ask for it - expect to go out of business pretty quickly
I have mod points and I am not afraid to use them
Look at Apple
People (fairly or not) complain it is overpriced; yet what alternative do they have?
You price according to value, and not strictly according to market, unless you want to go under according to market pressures.
You have to offer *something* of value, in offering GNU/Linux PCs, and that value has to be worth money, else no one will purchase and you won't be able to stay in business.
If your Linux based PC offers $800 value, and you charge $600, you are giving the buyer a $200 value to feel good about. In the same way, then, that is how the Mac market survives; Apple offers value greater than it's $1,400 computers, but only charges $1,400, value that cannot be found on a Windows or Linux PC.
If you're going to vend Linux PCs, then you need to give it something that makes it worth more than a comparable Windows PC, and charge enough to make money, but not so much that the user feels cheated.
Good luck with that ^^;
GPL Deconstructed
I'd look for a niche.
It's hard to get MythTV going, for example, and the technology is genuinely useful, so a company that sold prerolled myth tv boxes, with working remote controls, the ability to send video out to a normal tv, support for a home video lan, and all of that, would probably find a small enthusiast market. I think you could probably charge a little more too -- there's a kind of gadget freak who would buy it and not mind an extra hundred or two for something that was well built, from a company with good support.
I think that trying to sell cheap linux pcs to the general public is probably a losing proposition. I don't know how anyone can stand up to those $500 wal-mart HP Windows boxes.
Oh, the link is a reference to that Newsforge piece (which has essentially nothing to do with question asked here)? I thought Cliff was pointing out the irony of asking that question on a site owned by the most spectacular failure ever at profitably selling Linux systems. Excuse me, GNU/Linux.
Do I have anything constructive to say? Not really. Penguin Computing is still going strong. The problem with offering lots of little configuration options is that corporate users don't care about them and the individual users who want Gentoo and USB vibrator support are the last people who are going to pay you to do the fiddling that's more of an end than a means to them.
What I'm listening to now on Pandora...
What Linux user wouldn't rather recieve their PC completely blank? There is no "one master Linux distro", and part of the appeal of Linux is that you have so many choices. Rather than trying to pre-load distro X (when your users probably prefer distros Y or Z just as often), computer manufacturers should just leave them blank, maybe with an "all this hardware has been used successfully under Linux - YMMV".
even small oems use software like softthinks now to install and config each machine over a network with xp/2000 whatever. all you need is some wage-slave to put the boxes on the workbench and press 'go'. if you offered a choice of distros and a choice of hardware on linux you're looking at config staff payroll which would be huge. they'd have to be full on experts and sometimes they might like config 2 machines each per day or something.
i'm trying to give up sigs.
Los Alamos Computers These guys seem pretty good, and offer a lot of choice, and have some clearance systems.
penguin computing
Linux Certified
Linux.org's listing of linux hardware vendors. Doesn't seem to be that up to date(last I looked) but a good starting point for finding computers running linux.
Perhaps this thread presents an opportunity to the Slashdot editors to interview someone from some of the companies that are successful? Emperor Linux (linux laptops, many models, choice of distro) and of course Penguin Computing both spring to mind.
Eschew Obfuscation
Personally, I think one of the worst ideas is to tie your software and hardware directly together, as Sun has. Their hardware is way behind the times (too slow, and too expensive). It's better to use Linux as a way to lower overall system cost and say, "hey, now you can get a computer for $199!"
Some people think that Sun does have a future as a hardware manufacturer, but I think I will have to agree with the article, they can't win the fight against being squeezed out of the market by cheap Intel/AMD servers running Linux (or Windows..).
They really have to decide where they are going, and find a new way to earn money. I think Java is their best bet. I HOPE they will do something like IBM, and jump on the Linux bandwagon as the main platform for Java. Still, finding a steady and large revenue stream from that could be difficult. I suspect they get some from Websphere and the other one (forget what its called), and maybe some from selling courses in Java, but that can't be enough. If they started charging money for using Java I think they would discover that their customer loyalty would evaporate pretty quickly.
I suspect some people here on Slashdot will crow about the problems Sun is going through, but consider that Sun has actually been good for the Open Source world. If it wasn't for the fact that it is a cheap Java platform, Linux would not be as widespread as it is in the business world. Also, they gave us Open Office, and participates and even sponsors a number of Open Source projects. Ant, GNOME, Tomcat, GNUlpr, Open Office... Sure, most projects are Java related, but that is understandable and it is still more than most of the big companies have given us.
Well, if they die, it will be interesting to see what happens with Java. Perhaps they will Open Source it completely, if not out of the goodness of their hearts, then at least as a poison pill against Microsoft...
If it were me, I'd try to sell customers on added customized services that you can provide.
First, you're not going to sell much to tinkerers and hobbyists - the best you can do there is to have reliable hardware that is proven to work on some Linux distribution. Then, don't worry about it. They'll probably install their own favorite distro and apps.
Go after people that want portable unix, such as for training sessions, etc. Granted, a lot the customers are probably quite knowledgeable about Linux configuration, but I think there's still room to do some customization for them that they don't want to do.
And always, in the background, Linux laptops have to be compared to what people can get with MacOS X. There's some catching up to do....
"Provided by the management for your protection."
its as simple as that. 'cool software' is now so ubiquitous and widespread, that simply, the only really interesting area to innovate in these days, and add value, is in the hardware.
so, make the hardware nobody else has thought of yet...
; -- the corruption of government starts with its secrets. a truly free people keep no secrets. --
-- Bob
1^2=1; (-1)^2=1; 1^2=(-1)^2; 1=-1; 1=0.
I considered buying from them, but the prices just didn't fit the market. I can buy a laptop with the MS tax, or for more money I could buy from them. It just doesn't pay.
Yes it is worth something to have all componants that work in linux. IIRC they didn't provide that, instead it was everything but the modem (which is a hard point), and wireless. In the latter case they will sell you a 802.11 card so at least you can use it. (Of course with a million different laptops not all of the above applies to each one, but you get the idea)
By calling it Linux.
At work we build our own desktop boxes (~85% linux, these days) or get them from a local guy who does custom builds for a living, but when someone wants a laptop we've gotten them from a company called eracks; we've bought a half dozen or so over the past couple years, and have been pleased with them--especially the fact that you can talk to somebody who knows what they're doing if you need something less standard, such as a linux/bsd dual boot setup, etc.
-- MarkusQ
Here's the recipe:
1) selling PC's. You make a little bit of money at this, but mainly it's just advertising for the other stuff.
2) consulting/customizing. Billed at $75/$100 an hour, of course
3) custom PC's. Now you've got a custom load and configuration for a customer. Create a PLU for that custom PC. At first you're not making much money. But the customer is going to keep ordering that exact same PLU. Their price stays the same, yours keeps going down. 2 years from now that $1500 PC now costs you $500 to build but the customer is still paying $1500. Inventory management is difficult: PC parts keep going obsolete. Anytime you change anything you have to go back to the customer, which means you'll probably have to adjust the price. So stock up so you don't have to change anything...
And yes, customers really want this. If you can promise to deliver the EXACT SAME PC for 5 years, they'll pay a premium. And they'll be happy to let you ride Moore's law. It's difficult, because your Taiwanese vendors obsolete everything every 6 months, but it can be done, and there is sweet money to be had doing it.
2 & 3 usually work together. Shave those consulting rates to lock them into a volume deal.
I for one hope you did that with s/\</GNU\//g and not by hand.
I have started looking around for a linux desktop to replace the IBM Thinkpad I am using as my current machine. The biggest problem I will run into is convincing them that we don't HAVE to buy from Dell, IBM, etc. Anyone have any suggestions on how to approach this?
perl -pi -e 's/\s+/ GNU\//g;'
They start by dropping the ridiculous GNU/... hijacking of the Linux name. Nobody in business who's making a purchasing decision on some servers knows or cares what GNU is. It sounds stupid, and zealots who insist on bastardizing the Linux name won't ever get to the point of making such decisions.
Harsh, but true.
but, it was damn funny. (Score: 5 Funny)
Create a relatively high end Linux PC that anyone would love to own. Test hardware combos till the cows come home to be sure you have the best possible setup. Pick out everything -- choose one model of every type of device.
:) Or hopefully inspire more than one person to do so -- competition in this market would make everyones' systems better!
Negotiate with the makers of said hardware. Insist on a volume discount on products that will not include their Windows drivers (unless the manufacturer contributed to Linux drivers).
Create a custom Linux distribution that is very specifically taylored to said hardware. Have everything work perfectly out of the box. Make an install CD that will restore it to the factory defaults.
Load said distro with every single piece of potentially useful Open Source software. But be sure it all works. If you can't get something to work nearly perfectly, don't include it.
Include custom documentation. Lots of it. Sure, some people don't like to read docs, but if they're good, they are very useful. And some people like to page through manuals on their rocking chair. Document as much of the software as you can. Taylor the steps to your specific computer setup where applicable.
Heck, even include some programming tutorials, probbly using Python. Computers used to include that kind of stuff. They don't anymore, which is why few users know squat about programming. This should not be required reading, of course, but it should be there should a customer (or his 8 year old nephew) wishes to try their hand at it.
Basically, include enough documentation about interesting things to keep the user hooked for a long time!
Let the computer and distro be ready for an LTSP (Linux Terminal Server Project) implementation. And, of course, sell the terminals pre-configured. So tell people they can buy one monster box from you and a few cheap terminals for everyone else in the house!
I seriously wish I were in a position to start a company to do this. But I'm not, so I'm throwing out the idea in the hopes that it will inspire someone else to do so.
< Given the low margins in the PC market
Say what? I think that's a myth. If you buy a $1000 dell or gateway you're paying for a $700 machine with $300 markup. At least that's the way it played out with my Athlon 32 about 9 months ago. What kind of monkey business can't make money installing software for $300? And if you can get the component parts wholesale...whoa. Profit.
Most corporates I know buy their PCs from someone like IBM, Dell, etc., then simply overwrite whatever's on there with either a SOE desktop or a standard server build. Unless the corporate is big enough to have the vendor install their SOE build for them, it doesn't matter at all what the vendor ships them with; it'll get blown away and replaced before a user sees it. These customers have MS Select agreements so Windows installed on the box is just a nuisance.
I'm pretty sure that's the reason why at least one vendor (Dell?) sells a typical corporate desktop PC with FreeDOS on it - it just gets blown away, so why bother with a Windows licence?
Aside from the issues of competing with Dell etc. in terms of buying and marketing clout, I don't see that a small PC vendor would care if they were selling PCs with Windows or PCs with Linux as far as business sales are concerned.
OTOH, if they're selling to home users, most Windows users will want Windows installed for them and most Linux users will just reinstall their own favorite distribution in their favorite configuration - the vendor may as well not bother actually installing Linux at all, but just ensure hardware drivers for all the bits in the box are readily available.
Why did I do this? Lots of reasons, actually:
1) I needed boxes with generic parts that students can get into, to maximize the lifespan of these machines as I upgrade them. The Dells have way too many parts that I can really get from only one place... err, Dell.
2) I don't want to pay the Microsoft Tax for pre-installed stuff... I already have an MSDNAA license, so why buy additional licenses I simply don't need, even for the Windows students? (the other half have Linux on them) Besides, I'll just have my students flush out the HDD anyway as part of their coursework. BTW, I know that Dell has the FreeDOS option, but that's still something I have to rip out, and the price difference is mysteriously not all that different. The local guy assembled all of my boxen "naked", no sweat.
3) Local and instant response. The local vendor keeps a small pile of parts on hand so I don't have to dink about with inventory, and if I need something it's usually here before the end of the day, without needing FedEx.
4) They're HUMAN! Yes! No more wandering about through the Audix maze, no trying to explain for the 10^96th time what I need, and then being treated like the legions of morons who really don't know what parts they need. I just call the local guys up, and talk to the gent who already knows what I have and speaks on my level, not from a 'resolution tree'.
5) Individual parts are cheaper in most cases... For a RL instance, a $24 Dell 4/6-pin Firewire cable (plus shipping!) will cost me only $6 locally.
6) I don't get stuck with big fat warranties built into the price, and other crap I simply don't need... and no hassles over the phone during the purchase, either. As a corollary, if I want to modify the hell out of the boxen once I get them all installed and operating (I have), no sweat.
7) It helps the local economy, and creates a good symbiosis. These guys provide intern slots for (and occasionally hire) my students, and in return they get benefits that extend far beyond just the monster capital expense checks and a portion of my annual budget.
There are some cases where using a big vendor would prolly be more effective, but in a lot of other cases, it makes more sense to stay local.
Quo usque tandem abutere, Nimbus, patientia nostra?