by Tony Glover
BRITAIN'S National Health Service (NHS) has signed a
multi-million pound deal for a substantial number of new
handheld computers from UK-based computer company Psion
Teklogix. The deal signals a move away from laptops using
Microsoft's Windows operating system in favour of less
fragile devices running the open-source operating system
Linux. [cut] ...
Full article found at:
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This is another example of Linux acting like a disrupting technology
and arising in an emerging market where it competes against what
Clay Christensen calls "non-consumption", meaning that is a new
application of an operating system. It's also an example of the
advantage of modularity which disruptive technologies typically
exhibit, as opposed to "integrated architectures" typical of
sustaining technologies such as Windows.
> From: Christian Einfeldt <einf...@earthlink.net>
> Date: Tue, 25 May 2004 17:05:59 -0700
> To: dis...@openoffice.org
> Subject: Re: [discuss] UK National Health Service to use Linux handheld=
s
> =
> On Tuesday 25 May 2004 00:02, Selva wrote:
> > NHS deal with Psion heralds move away from Windows
> >
> > by Tony Glover
> >
> > BRITAIN'S National Health Service (NHS) has signed a
> > multi-million pound deal for a substantial number of new
> > handheld computers from UK-based computer company Psion
> > Teklogix. The deal signals a move away from laptops using
> > Microsoft's Windows operating system in favour of less
> > fragile devices running the open-source operating system
> > Linux. [cut] ...
> >
> > Full article found at:
> >
> > http://tinyurl.com/3frca
> =
> This is another example of Linux acting like a disrupting technology =
> and arising in an emerging market where it competes against what =
> Clay Christensen calls "non-consumption", meaning that is a new =
> application of an operating system. It's also an example of the =
> advantage of modularity which disruptive technologies typically =
> exhibit, as opposed to "integrated architectures" typical of =
> sustaining technologies such as Windows. =
> =
I actually never read Clay Christianson=92s famous book. Personally, =
I like to think of it as =93workload sharing=94. The new os does not try=
to =
displace the established desktop platform directly but rather =
assumes just a small portion of the total computing workload
required. Mobile devices such as sub notebooks like Psion make =
for an ideal vehicle for this. At the same time, the vehicle maintains =
connectivity to the established platform by using an application =
design that essentially spans both the desktop and the mobile device =
with the data connectivity being the central issue of importance to the =
user. =
Whether the data connectivity occurs by way of a network in corporate =
settings or by USB in home / small office settings, it really doesn=92t
matter. What matters is establishing market share using any way =
possible. Once market share is achieved, developer network effect =
builds automatically. No need to worry about games etc. for Linux =
right now. What=92s more important is to develop a truly useful Linux =
notebook / sub-notebook that can fit into today=92s business offices =
seamlessly, out of the box, and establish market share. Games, and =
vertical specific apps will then arrive fairly quickly. =
It's incredibly insightful and useful. First, it is great for moral=20
building. I am now seeing the OSS movement through entirely=20
different eyes. I once worried that there is not more OSS for sale=20
in computer stores. No more. Computer stores are part of the=20
channels for software which are going to be disrupted by the=20
alternative channels for distributing OSS: on line; through=20
government institutions such as libraries and schools; through=20
hardware add-ons; through customized vendors such as Progeny;=20
through OSS package vendors, such as SuSe, RedHat; through book=20
stores; through churches (!) [John Templeton, this means you]; and=20
through smaller computer stores such as Bedford Micro (link below)=20
which will resell recycled computers on margins too small for the=20
upper market tiers (at least at first, but then they will move=20
upmarket along with Linux, as OSS and OOo grab more market share=20
from MS). =20
Second, reading Christensen's book is great for people such as the=20
store owner of Bedford Micro and for OOo, because it can help us=20
identify how our best customers actually use our products. =20
Historically, successful disruptive technology strategies have=20
experienced enormous growth rates, which is why even big companies=20
like IBM are getting heavily behind OSS. Finding out how customers=20
actually use OSS will help us target the customers who are more=20
likely to actually "hire" our products to do the specific tasks=20
which they need to have accomplished.=20
Third, the idea that it is possible that OSS could actually do to=20
Microsoft what Microsoft did to IBM is utterly fascinating. I had=20
a significant life experience returning to Berlin a couple of years=20
ago to see Potsdammer Platz, which was once bisected by the Berlin=20
Wall. The last time I was in Berlin was 1982. If you had walked=20
around on the streets of Berlin openly proclaiming that in less=20
than 10 years the Wall would be gone, people would have walked=20
around you in wide circles, thinking that you were a wacko. =20
More to the point, if you had told people in 1982 that Microsoft=20
would disrupt IBM and eventually double IBM's market=20
capitalization, they also would have thought you were a wacko. =20
Now, my colleagues on the CAOC attorney list think that I am a wacko=20
because I am saying that it is possible for Microsoft to be=20
disrupted by free software programs. (Well, they also think I'm=20
wacko for lots of other reasons, for example, the fact that I use=20
OOo and talk about it too much on the CAOC list!) ;-) =20
We are going to live through a time in which the software market is=20
going to be turned upside down; the wealthiest man in the world is=20
going to see a loss of value in his personal assets by probably=20
50%; the "developing" world is going to develop IT infrastructure=20
such that they will exporting IP to the "developed" world; and a=20
worldwide monopoly which has evaded market correction and=20
governmental regulation will be broken. Microsoft will still=20
continue as a very profitable, very viable company, but it will=20
just be a normal company, such as SAP in Germany. =20
Also, the creative commons will grow to challenge the RIAA in the=20
market, and people will commonly get free or low cost entertainment=20
legally on line. Tivo and Tivo-like devices will be common, and=20
will automatically balance your checkbook, turn on your coffee in=20
the morning, answer your phone calls, and provide you with=20
streaming entertainment on demand. =20
> Personally, I like to think of it as =93workload sharing=94. The new
> os does not try to displace the established desktop platform
> directly but rather assumes just a small portion of the total
> computing workload required.
Sony clobbered RCA by starting off selling cheap portable radios to=20
teenagers. Tivo, Linux and OOo are going to clobber Microsoft and=20
reduce Microsoft to the status of a respected and profitable but=20
much smaller provider of narrow vertical market software. =20
Microsoft will also compete well in the home entertainment hub=20
sphere against TiVo, but as an early market entrant, TiVo will=20
always stay ahead of MS, as it was the first to develop those=20
channels for distribution, just as RCA's appliance store allies=20
were killed along with RCA.=20
> Mobile devices such as sub=20
> notebooks like Psion make for an ideal vehicle for this.=20
Yeah, Psion is a direct correlation to Sony's small portable radios=20
for teenagers.
> At the=20
> same time, the vehicle maintains connectivity to the established
> platform by using an application design that essentially spans
> both the desktop and the mobile device with the data connectivity
> being the central issue of importance to the user.
Christensen writes that when transistors arose in hearing aids and=20
portable Sony radios, they slowly started sucking applications,=20
distribution channels and customers out of the competing vacuum=20
tube network. CompUSA is going to be hating life as it=20
incredulously watches Linux march up market, whereas Bedford Micro=20
is going to be doubling and tripling its annual revenues for=20
several years until it plateaus. =20
> What matters is establishing market share
> using any way possible.
Yup. And that is going to happen by smaller companies such as=20
Bedford Micro and Progeny grabbing market share in the bottom of=20
the markets, where the margins are prohibitively small for CompUSA=20
or Microsoft; and in parallel markets such as Tivo and Psion. =20
> Once market share is achieved, developer=20
> network effect builds automatically. =20
Yep. In fact, Steve Weber, a Berkeley political science professor,=20
believes that companies like Sun and IBM and HP contribute code in=20
the belief that their return in terms of market share will justify=20
the expenses of paying the salaries and costs for OSS development,=20
for example, this very OOo discuss list! Again, as early market=20
entrants, Sun, HP and IBM will have distinct advantages over=20
competitors such as MS which has absolutely no OSS product sor=20
strategies at this time. Except that MS is trying to challenge the=20
anti-rivalrous nature of OSS by supporting proxies such as SCO to=20
sue participants in the OSS network such as IBM. This will slow,=20
but will not halt OSS growth, because 1) even MS has limited=20
reserves, and these actions deplete MS resources, but don't grow=20
business; 2) the OSS business network is growing faster than legal=20
actions by the MS-centric business network will be able to stop; 3)=20
4 out of 5 adults in the world have not yet chosen their operating=20
system; 4) many of those adults live in countries with substantial=20
OSS governmental initiatives; 5) those "developing" markets cannot=20
sustain gross profit margins which MS depends upon for its growth=20
targets, whereas many OSS projects either don't need gross profit=20
margins, or their gross profit margins actually can grow by=20
handling the smaller accounts in those markets.
> No need to worry about=20
> games etc. for Linux right now. What=92s more important is to
> > develop a truly useful Linux notebook / sub-notebook that can=20
fit=20
> into today=92s business offices seamlessly, out of the box, and
> establish market share.=20
Yeah, but don't be disappointed if subnotebooks don't take off right=20
away. The market leaders such as Microsoft have an interest in=20
serving those markets, and to Microsoft, those markets are a=20
sustaining technology. Just as market entrants usually win the=20
battle in emerging markets with disruptive technologies, the market=20
leaders almost always win battles over sustaining technologies.
> Games, and vertical specific apps will=20
> then arrive fairly quickly.
Yeah, but maybe not as quickly as you would expect. Again, games=20
and vertical market apps are a sustaining technology for the market=20
leaders, and so the market leaders will continue to aggressively=20
pursue that upper tier market. Gamers need the fastest machines=20
and the most compatible software. Content providers such as game=20
makers and movie and music makers will continue to work with=20
Microsoft on using proprietary standards to lock OSS out of this=20
area. And this market will continue to sustain MS and Hollywood=20
and the RIAA for at least another decade. The market of gamers=20
will always demand higher performance. =20
Performance is a functionality issue. Functionality issues are the=20
bread and butter of market leaders, whereas price is the bread and=20
butter issue of disruptive technologies, at least until those=20
disruptive technologies erode the market leaders' positions with=20
improving technology, as Sony did with RCA; as Honda did with=20
Harley; as Microsoft did with IBM; and as OSS will eventually do=20
with Microsoft. Microsoft will not be cornered and completely=20
disrupted until companies such as GarageGames and the Creative=20
Commons make significant inroads to the content space. In each=20
tier of any given market, competition for consumer dollars first=20
proceeds on the basis of functionality; then reliability; then=20
convenience; then price. =20
By the time competition proceeds on the basis of price, the product=20
has been commoditized. The operating system has been commoditized=20
by Linux. The office productivity suite has been commoditized by=20
OOo and AbiWord and Koffice, etc. Prices in Windows and Microsoft=20
Office have been falling for the first time in MS's history, as MS=20
buys the market, as it did with the London borough of Newham, in an=20
effort to stave off OSS growth. Microsoft beat IBM because the=20
desktop computer became commoditized, and Dell stepped in to offer=20
customized computers as competition switched from the integrated=20
architecture of the box itself, to the components within the box,=20
that is, the operating system (Windows) and the chip (Intel). =20
Now the operating system has been commoditized, and Progeny and=20
other companies like it are going to step in and provide customized=20
software packages which they will assemble, integrate, deliver, and=20
maintain for their enterprise customers. The same market forces=20
which helped Microsoft beat IBM will now help Progeny, IBM, HP and=20
small stores like Bedford Micro beat Microsoft. =20
The funny thing is that in the book, The New Imperialists, the=20
author writes that nothing gets Bill Gates as livid as being=20
compared to IBM, that is, how IBM got disrupted.
Chrisenson=92s book, I get the impression that he=92s saying that new, =
disruptive technologies tend to succeed in emerging areas that are =
not yet dominated by major commercial vendors. Although I agree =
that this is an important factor to some extent, I get the impression =
that the author is overemphasizing the role of this factor. There are =
some notable exceptions to this that I can think of myself. First and =
foremost is Linux coming from no where and very successfully =
destroying an established Unix market in a relatively short time span. =
Another example is the handheld industry. Five years back, Palm os =
had nearly 90% market share of the handheld industry and Microsoft =
had less than 10%. Not much software was available for MS=92s Pocket =
PC platform back then. When Pocket PC climbed to around 15% that =
seemed to be like a threshold after which a lot of Palm apps then =
became available also for Pocket PC. Now Pocket PC has around 40%
market share and Palm still has over 50% globally. Palm is now =
focussed on smartphone market and they are now tops in that category =
globally. But my main point for bringing this up is that it=92s another =
example of how an established industry leader in os business can be =
attacked very successfully by competitors. =
Although emerging markets make things easier for a new os to take =
foothold, it=92s not as important as one may think. The long term =
dominance of Windows makes you think that it=92s nearly impossible to =
break their desktop monopoly, but then again, how many desktop Linux =
vendors tried to put out a USB connected version of notebook or =
subnotebook similar to a USB connected Palm Pilot? None that I can =
think of. The Palm os was an immediate success not just because it was =
entering a new market but rather, more importantly, it=92s rapid uptake w=
as
because it was an out of the box solution that could connect data by USB =
to established Windows and Mac desktops. =
Once Linux mobile devices are developed that come with similar user =
friendly self installing CD=92s for host Windows and Mac desktop =
applications that can synch with the Linux mobile device then I think you=
will see a much more rapid uptake of Linux clients in the general =
consumer and small office markets. This could be the critical step =
required to rapidly reach the 15% market share threshold. Once that =
threshold is reached, I think you will see a relatively sudden massive =
increase in growth of support from third party application vendors and =
this then leads to more os uptake and it becomes a positive feedback loop=
=2E =
The critical step now I feel is to develop practical *connected* Linux =
mobile devices such as notebooks and Psion-like subnotebooks that ship =
with CDs for host software on Windows and Mac desktops and to try and =
establish more market share. Once you establish market share, =
everything else tends to fall into place by itself.
Regards,
Selva
Neuros MP3 Digital Audio Computer:
http://www.linuxjournal.com/article.php?sid=7028 -- Marco Fioretti
reviews the first portable hard drive player to support Ogg Vorbis
playback.
Myself I am looking into some low end digital cameras which mount as USB
flash. I already have a good camera using photoworks.com processing
that allows me to use good lenses.
So for now we continue to search and eventually the costs of closed
source developement for embedded devices etc will force changes in our
favor.
CWSIV