Open Source Software Sixty billion open source industry has a disproportionate impact on the trillion-dollar Information Technology market. Open source lowers the cost of computing by making it make accessible to smaller firms. It is more reliable and secure computing also lowers costs for all users. Open Source Systems reduces the cost of operating systems and databases so that companies can spend more money on product innovation or other more competitive initiatives. Oracle provides Linux for free and provides high-margin Linux support contracts for as much as five hundred thousand dollars. What is the additional benefit for Linux? IT is able to take over the customer from Microsoft—a firm that competes head-to-head with Oracle’s offerings. The bad news for Microsoft is that now all major hardware companies run Linux. This signifies a large, unified market that attracts software developers who might otherwise write for Windows. Indeed Linux operating system has captured a major share in enterprise software, mobile phones, and consumer electronics, however, it has captured only a small percentage of desktop computers. There are several reasons for this. One of the reason may be that it is difficult to install and use as compared to Windows or the Mac OS. This complexity can raise the total cost of ownership (TCO) of Linux desktops, with additional end-user support offsetting any gains from free software. Due to the small number of desktop users, third party developers hesitate from porting popular desktop applications over to Linux. Most consumers in developed nations think that Linux brings additional complexity and very limited desktop application in return for saving one to two hundred dollars by giving up Windows. Average income is lower in developing countries due to which Windows can be very costly for them. Consider the OLPC, Nicholas Negroponte’s “one-hundred-dollar” laptop. An additional one hundred dollars for Windows would double the target cost for the non-profit’s machines. It is not surprising that the first OLPC laptops ran Linux. Microsoft does not want a whole generation of first-time computer users to grow up without Windows. As this generation may favour open-source alternatives years later when they start their careers and become decision-maker in an organisation or become an entrepreneur. Considering this in countries where people have very meagre income, Microsoft has begun offering very low-cost versions of Windows. Microsoft is clever enough to offer a version of Windows for OLPC laptops. Microsoft knows that it won’t make much money on these efforts, the low-cost versions will entrench Microsoft products as standards in emerging markets. This will help in containing open-source rivals and positioning the firm to increase prices in future when income levels rise. Question 1. Investigate the reason for open source success in the enterprise market? Question 2. Do you think open source can be successful in Oman? Justify Question 3. Evaluate the Microsoft strategy to overcome the open-source threat?
Open Source Software
Sixty billion open source industry has a disproportionate impact on the trillion-dollar Information Technology market. Open source lowers the cost of computing by making it make accessible to smaller firms. It is more reliable and secure computing also lowers costs for all users. Open Source Systems reduces the cost of operating systems and
Average income is lower in developing countries due to which Windows can be very costly for them. Consider the OLPC, Nicholas Negroponte’s “one-hundred-dollar” laptop. An additional one hundred dollars for Windows would double the target cost for the non-profit’s machines. It is not surprising that the first OLPC laptops ran Linux. Microsoft does not want a whole generation of first-time computer users to grow up without Windows. As this generation may favour open-source alternatives years later when they start their careers and become decision-maker in an organisation or become an entrepreneur. Considering this in countries where people have very meagre income, Microsoft has begun offering very low-cost versions of Windows. Microsoft is clever enough to offer a version of Windows for OLPC laptops. Microsoft knows that it won’t make much money on these efforts, the low-cost versions will entrench Microsoft products as standards in emerging markets. This will help in containing open-source rivals and positioning the firm to increase prices in future when income levels rise.
Question 1. Investigate the reason for open source success in the enterprise market?
Question 2. Do you think open source can be successful in Oman? Justify
Question 3. Evaluate the Microsoft strategy to overcome the open-source threat?
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