Home > Linux > Linux Brings in Big Bucks Linux Brings in Big Bucks Submitted by dave_sn 2003-01-23 Linux 16 Comments IBM and Hewlett-Packard garnered billions of dollars in revenue from Linux-related products in 2002, the companies said this week. Update: IBM: ‘Linux is here to stay‘. About The Author Eugenia Loli Ex-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker. Follow me on Twitter @EugeniaLoli 16 Comments 2003-01-23 5:42 am IBM and HP = Next Enron ! Come face it making money of Linux does not work. Look at Mandrake or Loki if you want a good example of what am talking about. 2003-01-23 5:50 am Could you please join the moron/troll crowd at slashdot along with the half witt “IN SOVIET RUSSIA”, ok? Profits made from Linux sales have been hardware, services and applications that run ontop of the operating system. As for Loki, they failed because they were in a market where there was NO significant demand. They started back in the XFree86 3.3.6 days, when XFree86 was a crap architecture to write any applications on. If this company was started TODAY and focused not only on games but applications as well, such as Quicken, Photoshop, and Wordperfect Suite, they would be pulling in the money like nobodies business. How about you actually look at the larger picture instead of assuming and making up stories like “dah, its Linux so everything must be freeeeeeeeeeee, dah”. It appears that OpenSound makes software for *.nix and still makes money. The Kompany, another organisation that makes money and writes software for Linux. The list goes on and on. Get use to it sonny, the days of your lies is no longer. 2003-01-23 5:50 am I think we agreed to not troll. Please be more courteous. 2003-01-23 6:02 am Take away the hardware sales and Linux has not earned a dime worth talking about when compared to industry leaders like Microsoft. This report smells of IBM paid FUD. Say what you will but in my opinion Linux and companies that push it down people’s throats usually end up broke and bankrupt. I believe that capitalism works and that charity does not work and has been proven time after time to be the downfall of companies that relay on it. As long as you have idiots like Stallman pushing that GNU/Socialist Commie approach to software Linux will always remain a niche market on 0.1% of all desktops. Hell even Apple will surpass Linux and they are barely staying alive with their expensive a$$ hardware that requires you to mortgage your house in order to buy a Mac that 3 years ago would of actually be able to compete with a PC in terms of preformance. P.S. Don’t give none of that “My mac can beat a PC in Photoshop” line. Photoshop means nothing in the PC world when it comes to performance. 2003-01-23 6:18 am You little frigging wanna be. 2003-01-23 9:45 am pffft, it’s troll time again Anyway OpenSource may have big companies using it nowdays but all signs are still pointing to a healty enviroment. Most, if not all, the companies are reinvesting and releasing a lot of software and technologies back into the opensource domain. IBM and HP are selling services (and even supporting Debian whoohoo). I’ve only been using opensource for about 2 years now, previously being a MS power user, and although it’s true that linux has become the darling of the big companies should they start disappearing nothing much will change, maybe a bit slower development and the disappearance of a few linux companies, but as long as there is Debian (*bsd, …) there is going to be opensource. The big thing IMHO is that opensource liberates all the big/small companies by making a general knowledge pool wich isn’t hindered by stupid legal obstructions and cost. Remember it’s easy to make something but it’s really hard to maintain something. Opensource just places everything into a common pool where everyone who has the same needs problems can dip in, use the code, change the code and contribute back so that future generations with the same problem aren’t standing before a brick wall anyway my 2 cents 2003-01-23 11:15 am It is money they would have made anyway with another operating system. The “Linux” link is not really that important and quite irrelevant. Of course for Linux this is good news since it means more Linux systems out there. 2003-01-23 12:15 pm “It is money they would have made anyway with another operating system. The “Linux” link is not really that important and quite irrelevant. ” Is that the case? I would have thought that the linux link was allowing IBM to sell hardware that they would not have running their own OSs, e.g. mainframes and AS400s (or whatever they are called now). In any case, IBMs internal costs for Linux must be less than their own OSs as at least some of the development is done for them. 2003-01-23 3:09 pm I thought your policy was to moderate posts that are just personal attacks. I am a bit disappointed with the moderation system here: so far, I have seen opinions moderated down, while personal attacks, even posts that contain nothing else but personal attacks, are being left alone. 2003-01-23 3:12 pm Dizzy, from what I’ve read IBM is now selling systems using linux that they could not sell without it, and the reason is that it is a different market. The main market for linux on IBM mainframes as I understand it is not the traditional large mainframe applications, but rather having the mainframe act like hundreds of seperate linux boxes, for example if you supply web services then you can replace a huge number of intel boxes running linux and apache (which most of the time will be running far below maximum capacity, thus effectively wasting performance and space, both of which you pay for) with one IBM mainframe which can allocate performance completely dynamically where it is needed at any time. Ironically the success of Linux on IBM hardware is to me a prime example of the problem with Free Software as a business model, it can make a great deal of money, but not for the guys who actually write the stuff! 2003-01-23 4:43 pm >>>>Ironically the success of Linux on IBM hardware is to me a prime example of the problem with Free Software as a business model, it can make a great deal of money, but not for the guys who actually write the stuff! I have no problem with IBM/HP making a great deal of money off Linux. The problem is at the other end, where the redhats and corels of the world think that they can be the next microsoft. It’s the unreal expectations of the linux companies that are the problem. They have less employee, less revenue, less profit than your average McDonald’s fast food restaurant — but they want to make themselves billionaires. You can make money off linux from training to consulting — it’s just that you wouldn’t make billions off of it. 2003-01-23 8:00 pm What “ad-hominem” meams? Secondly, I am not here 24-7. I have a life too, and in fact, I just woke up. There are 5 more moderators on OSNews. Instead of calling my name, Eugenia this and Eugenia the other, talk generally. I am not the “boss” over here anymore, and I don’t want to spend much time on osnews anymore. Neither I happen to read each and every comment around here. I think I was clear about this a month ago when I said that I will reduce my time over here. If you have problems with the moderation please send an email to writers AT osnews DOT com and ask the rest of the people to participate to the moderation process. Don’t blow it all in my face Mario, don’t be so unfair. 2003-01-23 8:29 pm “It is money they would have made anyway with another operating system. The “Linux” link is not really that important and quite irrelevant. ” Trolly is more right than he knows. The real story is that IBM having come to the same conclusion as Trolly , picked the OS they are to a significant degree betting their future on by throwing darts. Thus we can add Dumb Luck to the list of reasons for the the Linux upsurge. 2003-01-23 9:08 pm >>>The real story is that IBM having come to the same conclusion as Trolly, picked the OS they are to a significant degree betting their future on by throwing darts. >>>Thus we can add Dumb Luck to the list of reasons for the the Linux upsurge. I disagree with your reasoning. IBM bet the company a long ago, IBM had spent the last 10 years making itself a SERVICE company with a big patent income stream. Linux is just an extension to that strategy. And what is IBM’s Linux strategy? I quote this before, but you can see where they’re going: http://www.sslug.dk/patent/strassemeyer/transr-del.shtml 1) RedHat takes the patent infringement risks, IBM will never distribute their own linux distribution. 2) Commoditize the linux OS. 3) RedHat makes enterprise editions and sells it for $1,000 each plus annual subscription. IBM pays probably less than $100 for each OEM. IBM pushing big corporate customers for last 10 years to out-source their entire IT departments, so these big corporations don’t need to pay RedHat’s annual subscription. 4) Sell all kinds of hardware, intel, ppc, anything. 5) RedHat can’t make a profit off the OS, so they make management software. 6) IBM consulting has 100,000+ employees, they (and Computer Associates) have the best management softwares, they have hundreds of PhD’s working on AI-like self-repair management softwares. 7) Any big future problem with GPL. No problem, IBM has computing power for rent — and since IBM controls all their own power grids, no linux distribution (and no need to give back any source code improvements.) 2003-01-23 9:43 pm That is an excellent analysis of IBM’s strategy and I do not dispute it. However, I was mostly being sarcastic about IBM use of Linux being irrelevant as a way of showing the foolishness of Trolly’s trolling. I didn’t say IBM was betting the company on Linux. I said to a significant degree. I think their involvement with Linux could be characterized thus. My point is simply that if IBM didn’t see some value in Linux they wouldn’t bother with it to the extent they have. They may make mistakes, but they don’t do things nilly willy as Trolly would like us to believe. It’s not just them. The entire computing Industry is starting to realize that Linux and Open Source regardless of whether they are currently the best technology represent the last best chance to get out from under Microsoft’s thumb. And that is something of inestimable value. 2003-01-23 10:26 pm >>>>The entire computing Industry is starting to realize that Linux and Open Source[,] regardless of whether they are currently the best technology[,] represent the last best chance to get out from under Microsoft’s thumb. I disagree — the 3 biggest linux winners will be IBM, HP and Dell — because they don’t have an obsession against Microsoft. You don’t see IBM and BEA complaining about Microsoft’s stance on java, like what SUN is doing in the courts. IBM and BEA are making hundreds of millions of profits off their enterprise java server software, all the while SUN is stuck in 4th place in that market. You don’t see IBM, HP and Dell making their own linux distributions because that’s a commodity with no profit protential but a lot of patent infringement risks. SUN is making their own linux distribution for no reason other than cheering the anti-MSFT slashdot readers. SUN spent $2 billion to buy Colbalt, yet IBM/HP/Dell has a combined 70% of the market share of linux hardware market. SUN has a tiny 0.2% of the linux hardware market. It’s never a sound business decision to spend billions of dollars on corporate strategies just to “get out from under Microsoft’s thumb”. All the linux winners are those who don’t care what Microsoft is or isn’t doing, for them if there are enough customers demanding DOS — they will sell DOS to you without any anti-MSFT rant.