Linux is small biz boon, enterprise experiment -- for now

The findings of a new report suggest Linux is making huge gains with small to medium-sized businesses. But will the widespread adoption of Linux on the desktop at the low end mean the operating system will lose its appeal to larger companies?

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Demand for Linux is increasing among small businesses, according to one analyst firm, and for reasons most people could guess -- flexibility and price. just like everyone else. But if Linux is to make the leap for the ultimate prize -- the enterprise -- and really make this open source operating system mainstream, it must overcome a number of obstacles -- the biggest of which may be Microsoft.

Low-end market computing needs are a lot less complicated; they may require applications for very basic things.

A recently released report from Boston-based Yankee Group suggests that within the next six to 12 months, up to 5% of small businesses -- those with less than 500 employees -- expect to have the majority of their desktops running Linux. When the scope of the survey was expanded to more than one year, the numbers jump to as much as 10%.

According to senior small to medium sized business (SMB) analyst and author of the report, Helen Chan, small businesses are prime candidates for migrating to Linux because they can become irritated when forced to upgrade a product just because a vendor, such as Microsoft, wants to move a product in a new direction.

"[In general] low-end market computing needs are a lot less complicated; they may require applications for very basic things," Chan said.

While Chan's report hardly offers any market-altering revelations, the findings suggest that Linux, like Windows, has its place from very small to very large organizations.

Still, Redmond will remain the dominant system used on desktops within small businesses. Currently, 28% of those surveyed by The Yankee Group were still using Windows 98, while 2% were using Windows 95 -- 46% are using Windows XP.

If Linux expects to make inroads into the workplace -- small or large -- Linux must move in on an environment that is "ruled by Windows," Chan said.

"One thing [with Linux] is you lose the ability to use Microsoft applications. That in itself is big risk," she said. "[However,] if the organization is not based on that premise, Linux takes on more of an appeal."

For example, Chan said small organizations with Linux desktops can use Sun Microsystems' StarOffice, as a less-expensive Microsoft Office alternative.

The Linux experiment continues

Whereas some small businesses may be able to get away with dumping Office and focus exclusively on Linux-based applications, some observers have suggested that medium-sized and enterprise-level entities are slower to adopt Linux because of what they perceive as a lack of application support.

"From a service standpoint there is more Microsoft support [than Linux support]," Chan said, but this is likely to change as heavy hitters like IBM weigh in with more open source and Linux options.

"There's some experimentation happening; technologists [in the enterprise] tend to have a bias against Microsoft mainly because they believe it is not a strong enough platform -- some engineers believe Linux has a lot more reliability," she added.

Chan said IT departments in enterprise level organizations may have the budgets and "tech savvy" to experiment on the Linux platform, but medium-sized businesses -- those with fewer than 1,000 employees -- are less likely to have the personnel and are more likely to be working with a business partner to fulfill their requirements.

"[Medium-sized businesses] may have someone internally to work with a business partner, but that person is not going to have a Ph.D. or the technology background to have the time to experiment on these [Linux] technologies.

"They may have more constraints in budget and don't seek to be on the bleeding edge but do want more efficient products, proven technologies. Right now, Linux is not quite ready," Chan said.

However, as application support increases with contributions from Big Blue, Sun Microsystems and others, look for this trend to change.

"[Large vendors] are bringing credibility to [Linux] and have already started to spur interest in the technology," Chan said.

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