MESSAGE
| DATE | 2004-03-25 |
| FROM | From: "Inker, Evan"
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| SUBJECT | Subject: [hangout] HP Move Could Change Microsoft Strategy
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Posted on Thu, Mar. 25, 2004
HP Move Could Change Microsoft Strategy
TRAVIS REED
Associated Press
SALT LAKE CITY - Hewlett-Packard Co. says it is yielding to large clients'
demands and expanding Linux distribution - a decision that could force
Microsoft to reconsider some of its corporate pricing for Windows.
HP announced a wider partnership on Wednesday with Novell Inc. and plans to
package its SuSE version of Linux with computers bound for corporate
clients.
"What's interesting is the possibility it will give Microsoft the impression
that it's actually in a competitive market," IDC analyst Roger Kay said. "It
would act like a competitor rather than a monopoly and use price as a
competitive tool."
Microsoft Corp. declined to comment, and an HP executive downplayed
suggestions of fiercer competition for the software behemoth at a news
conference Wednesday.
"Our Microsoft relationship is good, strong and powerful," said Martin Fink,
vice president of HP's Linux division."
Still, Redmond, Wash.-based Microsoft could stand to lose the most if HP's
new venture proves successful.
HP decided to move more toward the Linux platform after "a number of very
large customers from Fortune 50 companies" expressed interest in the
product, Fink said. Those customers are looking for ways to cut information
technology costs, and figure that cutting out the expense of buying multiple
Windows licenses would help, he said.
HP already offers Linux options for select client systems, and sells more
than 400,000 Linux-based workstations each year. But Fink said most of those
clients are in Asia and Eastern Europe, and Wednesday's announcement
reflects a bigger commitment to integrating Linux desktops into corporate
operations in North America.
Fink declined to offer specific projections of how many more Linux-based
desktops the company might sell.
"We want to grow at least as fast as the market, and faster if we can," he
said.
The desktops would be available only to corporate consumers. He wouldn't
comment on how much the units would cost, saying expenses would vary by
client and by distribution method.
Linux, an open-source operating system that's developed by a community of
volunteer and paid programmers, has so far found traction mainly in
corporate servers, not in desktop PCs. Today, only up to 3 percent of all
client computers ship with Linux, though the number is difficult to track
since half of them end up in China, where many of the computers end up with
copies of Windows installed, Kay said.2
"The reality is it's probably 1 percent using Linux," Kay said.
Fink said he expected to roll out the product in the second half of 2004.
Customers would have a choice of obtaining the software directly from Novell
or using a version packaged with the computer.
Eventually, Fink said, Linux desktops would be preloaded onto machines.
The company made the announcement at BrainShare, Novell's annual convention.
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