RealTime IT News

Sell More Linux, Make More Money

Practice may not necessarily make perfect, but when it comes to Linux it will make you money.

A new study conducted by the Institute of Partner Education and Development (IPED) reveals that the channel can profit handsomely from selling Linux solutions.

Among other high-level findings is that survey participants also noted they would be ramping up their Linux initiatives to further capitalize on the opportunity that Linux presents.

The study, sponsored by Novell, AMD, Levanta and HP, involved more than 400 solution providers in the channel with revenues of $1 million or greater.

Of the solution providers polled, 58 percent noted that Microsoft is a top strategic vendor. The study, according to Rick Vieth, senior practice leader at IPED, did not ask participants whether they were part of Microsoft's partner program.

The study did however ask which operating system solution providers were displacing by using Linux. Nearly half (48 percent) of respondent noted that Linux was being used to replace Microsoft Windows.

Linux currently represents 8 percent of the total annual revenues of the 400 respondents. Annual growth as cited by respondents is expected to be 4 percent. The key to making more from Linux may well be to simply sell more Linux.

"What we found is a perfect correlation that showed that the more Linux-based solutions that they were selling, the more relative profitability they had in their business," Vieth told internetnews.com.

"Practice makes profitability."

The correlation is not lost on solution providers. Some 19 percent of respondents indicated that they planned to increase the number of Linux-skilled employees by greater than 50 percent.

Forty-two percent cited better technical support as being something Linux vendors should be taking in support of their resellers.

The need for clearer revenue models was noted by 32 percent while 30 percent indicated that they want more channel marketing support.

The study did not ask whether solution providers were using free Linux solutions or whether they were switching from paid to free as a way to boost their profitability.

Paul Yoachum, global partner and channel marketing manager at Novell, doesn't think that free offerings necessarily affect the solution providers.

In addition to Novell SUSE Linux Enterprise, Novell also has a free Linux distribution now called OpenSUSE.

"If you look at the study, the No. 1 reason for lack of adoption is a lack of expertise, hence the need for a channel to support that," Yoachum told internetnews.com.

"I think by and large customers and partners look at the ecosystem and they want to feel warm and fuzzy that it's supported.

There are training opportunities available, and that performance and reliability are all part of the package."

David Dennis, director of products at Levanta, noted that the move from paid to free is sometimes seen by him with Red Hat, with users moving (or threatening to move) to CentOS, which is a free clone of Red Hat's paid offering.

Dennis sees the free offerings as being used as leverage that an end user can use with a vendor.

"It's not that the paid versions of Linux are going away; they are just making a cost assessment that, 'Gee I'll keep paid for mission critical but the less critical I'll use the free version,'" Dennis said.

He went on to note that when companies do use a free version of Linux, it is usually at the expense of using Microsoft.

Levanta CEO Matt Mosman was a bit more explicit than his employee in terms of the movement from a paid to a free version of Linux.

"We have exactly no customers that have shifted from a paid version of Linux to a free version," Mosman said.

And what of the Linux boogeyman?

There was a time when SCO was considered a barrier to the adoption. According to the survey respondents that's no longer the case.

Vieth noted that legal issues ranked seventh in terms of obstacles for Linux adoption.