Linux faces a bumpy road in India

By , agencyfaqs! | In | July 25, 2001
Caldera plans to fight Microsoft in India for market share, but the task will be extremely tough


Linux is supposed to be goofy and fun. That is why the founder of Linux, Linus Trovald, chose a slightly plump Penguin, who looks like he has just had a good meal, as the mascot. Now Caldera, which provides Linux packages to commercial users for a fee, plans to fight Microsoft in the Indian market. But challenging the monopoly of behemoth Microsoft over the operating system market in India will not be easy. Especially, when Caldera is trying to make money out of a free operating system like Linux.

In India, operating systems are synonymous with Microsoft, and the average computer user will be surprised to know that other operating systems exist. This, despite the fact that worldwide, Linux is expected to have a growth of 154 per cent in 2001 (according to research published by the British software firm Idaya). For all that, the going may be tough in India, where, according to the Directions 2000 report released by IDC (International Data Corporation), the Linux market share was pegged at 2.6 per cent.

The Indian market is a challenge that Benoy Tamang, vice-president, corporate development, Caldera, is looking forward to. "We will make communication the key point of our marketing strategy. Linux has done very well in specialised vertical markets such as finance, banking, and government. It is these areas that we will focus on," he outlines his company's strategy. However, Microsoft has made considerable headway in these sectors last year, especially among its clients Vijaya Bank, Allahabad Bank and HDFC. Says NB Sundar, marketing manager, Microsoft India, "Linux serves as healthy
competition to us in the low end space, whether its basic file print services or web serving."

Caldera also plans to take up the challenge of .NET, Microsoft's platform for XML Web services. XML Web services allow applications to communicate and share data over the Internet, irrespective of operating system or programming language. Tamang is cryptically optimistic, "Let them plough the market. We will follow," he quips.

The key advantage that Microsoft has is its visibility, a point that was driven home when the colourfully designed handouts of Caldera, with the title "Oh, yes!" - an echo of operating systems - evoked puzzled frowns. Marketing is all the more crucial in these troubled times. A recent study conducted by American Business Express showed that marketing during a recession is more than twice as important as marketing during a period of financial abundance. And the marketing strategy of Caldera in India, which is to meet members of the IT community and, as Tamang puts it, "talk to them", is in tune with the company's global strategy of building the credibility of the Linux operating system, by showing the many ways in which the company's products can be used.

The competition will be all the more keen as Microsoft, with its operating system Windows, greedily eyes the server market, where Linux has had most of its successes. Microsoft has dominated the desktop operating system market, but now is trying to shift its leverage into the server market.

The contrast between the two is one between David and Goliath. "I've never had a customer mention Linux to me," Bill Gates once disdainfully remarked about the Linux operating system. Linux was based on the principle of the free movement of software, but right now, Caldera is rewriting some of those rules. The fundamental problem with the Open Source movement was that, for all its idealism, it could not make much money because of its emphasis on shared code freely available and free licenses. Caldera is trying to make up for this by sticking a license fee on its new Open Linux Workstation product. Caldera claims that by doing so it is just trying to get over the impression that freeware does not have as much quality as paid-for software. The new licensing fee is aimed only at commercial users. However, analysts say that such practices take away from the spirit of the Linux movement.

One of the major differences in the Indian market is the concentration of an enormous amount of computing talent in a relatively small geographical area. PC penetration stands at less than 5 per cent at present, and most of them use Microsoft software.

To let them know about Linux will not be so easy, especially if they have to pay for it.

© 2001 agencyfaqs!