Linux installations equals profit: study 20 August, 2006 By Liam Lahey

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The poll of more than 400 U.S. solution providers was conducted by the Institute of Partner Education and commissioned by AMD, HP, Levanta, and Novell.

"When evaluating technologies, the solution provider community first and foremost weighs the profitability opportunity," said Rick Vieth, senior practice manager at the Institute of Partner Education and Development. "What the data from this study shows is that the solution providers that have established Linux practices are experiencing higher profitability margins than those that are not.

"It also suggests that for the solution providers that may only be dabbling in Linux, or doing just one installation per quarter or less, they are potentially missing out on significant profitability opportunities and in some cases potentially doing their customers a disservice."

Among the key findings:

*Application services, web hosting and databases are the three most important horizontal Linux solutions for solution providers.

*The highest correlating technical reasons for solution providers that prefer Linux solutions is that the OS has better security, reliability and performance than other OSs.

*Cost saving is the most strongly held overall reason for Linux as the best choice of OS.

*Lack of in-house expertise, application breadth and difficulty of managing Linux are the top three obstacles that solution providers site for customer acceptance of Linux.

*Better technical support, stronger ecosystems and clearer revenue models are the top three Linux vendor actions sought by solution providers.

*Windows accounts for half of OSs replaced by Linux.

*Solution providers plan large increases in the percentage of employees capable of selling Linux.

Linux is the new UNIX, and it has a growing following of mostly ex-UNIX users and evidently it is picking up some former Apple folks too -- if the rumors circulating on blogs stand correct, remarked Rob Enderle, principal analyst for The Enderle Group in San Jose, Calif.

The money in Linux isn't in products right now. It is in services and that means if you are going to do it you need to roll up the sleeves and do it well, he said.

"The market is increasingly capable of being able to weed out the bit players. And the support, even from Red Hat and Novell, isn't the same as it is with Microsoft which means they need to take up the slack," he said. "This is a different approach for most resellers who don't already do UNIX or Linux and if they don't understand the differences and learn to shift to the new model they won't be successful with Linux."

One area of increasingly very high value is cross platform skills: Being able to get Linux and Windows products to work together well is an incredibly valuable skill right now since, increasingly, companies becoming mixed environments, Enderle said.

"Were I to advise a focus for growth it would be here that I would suggest the greatest benefits could be found," he said. "So rather than pushing one product or the other, pushing the skill of being able to work well with both would probably provide the greatest dividend."

Linux provides a great opportunity for solution providers to grow their business, said John Judge, vice president for alliances at Novell.

"This study confirms what many Novell channel partners already know -- that they can build a robust and thriving services business around Linux," he said. "Solution providers and integrators can work with their customers today to deploy 'business critical' applications on SUSE Linux Enterprise 10, and in the process generate significant opportunities for consulting, training and migration services."

The study can be freely downloaded at www.linuxinthechannel.com.