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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?
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
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."
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.
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.