Has Linux Become a Flop?

Let me get the punchline out of the way: No, it hasn't!

There, now we can get down to business. Recently, we have seen Linux-related stocks hit all-time lows, an assortment of Linux magazines die, Linux companies fold or cut back significantly and other companies pull out of the Linux market.

What does this mean?

Well, rather than using my crystal ball, I am going to use our eight years of experience within the Linux community and some logic. I hope this will be almost as reliable as the old crystal ball.

When Linus decided the world needed Linux, his decision was based on the fact that he thought he could create something that was needed, a work that offered something new to people around the world. Time has shown he was right.

In 1993, when I decided the world needed Linux Journal, it was because I believed in what Linus was doing and felt there was a need to offer a professional journal to help spread the word. Time and reader feedback has shown me I was right.

So, what's with the current situation? First, take a look outside the Linux community. Sun Microsystems stock that was selling for $120 US per share is now selling for under $40 (actually under $20, but there was a two-for-one split). Apple stock dropped from over $50 to around $25 in one day and, six months later, is still in the low $20s. Cisco did a nosedive from over $40 to under $20 in under two months. I could go on.

Now, while the stock market hasn't had a real winner lately, not everything dropped 50% or more. What happened is investors got scared and took money out of what they saw as speculative investments and put it into more secure investments. Anything associated with the dot-com racket was considered seriously speculative and was hit extremely hard.

Don't believe me? Look at IBM. While everything else in technology was going down, IBM was fine. Why? Because it is the big, stable one.

Now, on the other end of the spectrum, let's look at Linux, the new kid on the block. Microsoft says Linux is bad news. All the venture capitalists who jumped on the Linux bandwagon backed off. All the companies that decided they should expand into the Linux space (that includes hardware, software and publishing) realized they were out on a speculative limb and backed down. Thus, Linux is the current victim of short-term desire for big profits.

This reminds me of a phone conversation I had back in the mid-1980s. SSC used to teach a bunch of UNIX-related classes; that is, a short class for managers, a nontechnical class, a class for programmers and a class in C programming. I was talking to a person about the C class. When he found out it contained a lot of information about the UNIX C compiler, UNIX-related libraries, the make command and other software unique to UNIX, he told me we could get a lot more students if we took all that stuff out so MS-DOS users would want to attend. I explained to him that SSC's focus was documentation and training related to UNIX, not computers in general. He thought I was crazy.

Well, maybe I was, and maybe I was crazy again when I decided Linux Journal was needed, but at least I feel good about my insanity. Today, you see the people who got into Linux for the money leaving town. Unfortunately, that means some good people who believed in Linux but got into the venture capital game are getting hurt. However, that doesn't discount the value of Linux.

In fact, let's talk about the value of Linux. If this is a real economic downturn rather than just money shifting around, Linux becomes more valuable. For example, an article in the May/June issue of our sister publication, Embedded Linux Journal, is about the US Postal Service using 7,200 Linux-based computers to read zip codes and write bar codes on envelopes. That's 7,200 computers that didn't need licensing fees paid for a proprietary operating system.

That's just one example. Look at the number of web servers in the world. Every Linux-based web server is one less software license. All this use of Linux shifts money from unnecessary software licenses to other areas. Those areas could include hardware, salaries or just plain savings.

Linux use continues to grow. If you don't believe that, start counting web servers and embedded systems. Sure, the majority of computer desktops don't run Linux, but that is actually the area where Linux has the least penetration. Linux is doing fine. It will continue to grow in use and value. It's too bad some Linux believers got off track thinking the end goal was money rather than world domination. This little shake-up should help us get back on track.