Dvorak Rings Death Knell for Microsoft’s Business Model

March 8, 2009 by
Filed under: linux, news, opinion, windows 

John Dvorak has an article on Marketwatch, (posted yesterday), that claims that the new fast boot, embedded Linux options offered by Asus and Phoenix Technologies mark the start of Microsoft's decline.

Users will use these fast booting options out of convenience and get there first exposure to Linux. Once they realize that they can surf the web, listen to music, watch movies, and maybe even edit word processing documents just as easily, then they will start to realize that there really are viable alternatives to Windows and MS Office.

As a demonstration of the cost of traditional software, Dvorak has an example of building a basic Intel Atom based computer. From the article:

Right now, for example, I can get a complete Intel motherboard with an Atom processor, ready to install in a box, for about $100. All I need is a $30 memory module, an inexpensive hard disk ($50) and a case/power supply ($75). For $255, I can have a pretty nice cheap machine. Now I have to add the most basic version of Windows for $199? And Office for another $399 (standard no-frills edition)?

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Let's add this up: Hot little computer: $255. Basic low-end Microsoft software: $598.

Dvorak's numbers seem a little out of whack to me. It appears he is using retail prices for the software, but relatively low hardware prices (although we can find better, as you will see). Newegg.com has some of the best prices on the web, so I'm going to re-run his numbers based upon the prices at Newegg.

Note: I will be using OEM hardware and OEM software where possible. My assumption is that if you're savvy enough to put together your own computer, then you're savvy enough to use the "unsupported" OEM version of Windows.

Hardware
Intel BOXD945GCLF motherboard with Atom 230 processor - $64.99
Patriot PSD22G6672H 2GB DDR2 667 memory - $21.99
Western Digital Caviar SE WD3200AAJS 320GB 7200 RPM 8MB Cache SATA 3.0Gb/s Hard Drive - $49.99
APEX MI-100BK Black Steel Mini-ITX Tower Computer Case with 250W Power Supply - $55.99
Hardware total - $192.96

Software
Microsoft Windows Vista Home Basic SP1 64-bit OEM - $89.99
Microsoft Office Home and Student 2007 - $79.95
Software total - $169.94

In Dvorak's example the software costs 2.35 times the hardware cost. In my example the software costs 0.88 times the hardware cost. Wow, big difference!

I think the numbers in my cost analysis still make a compelling case for Linux. With hardware prices as low as they are now, the software nearly doubles the cost of the build for a low end PC. For a basic Intel Atom based computer running Windows and MS Office, the total cost is $362.90. The same computer running Linux and OpenOffice can be had for the hardware price alone of $192.96.

The unfortunate thing for Linux is that hardware vendors only seem willing to pre-install Linux on low spec machines such as the one in my example while the better equipped computers get some version of Windows. This gives the public the perception that the only reason to use Linux is to save money. The "better" computer comes with Windows, so Windows must be better than Linux.

What Linux really needs to move forward with consumers is for a computer vendor to have the guts to pre-install it on higher spec'd machines that are on caliber with their Windows counterparts. This doesn't mean they need to put Linux on a $3000 work station, but how about on a netbook in the $400 - $500 range that has a decent sized hard drive and at least a six cell battery. Too many Linux geeks have had to purchase a netbook with Windows on it in order to get the level of performance that they want only to wipe the hard drive clean and install their favorite Linux distro.

I'm not sure Dvorak succeeds in his case for the decline of Microsoft. The fast boot micro distributions may further reinforce the consumer's impression that Linux is only good enough for basic tasks.

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