PC Forum: Embedded in Scottsdale
Editors' Note: The following is the text of the current SuitWatch newsletter, by LJ senior editor Doc Searls. Subscribe to SuitWatch here.
PC Forum is the most august and durable of the high-end computer industry conferences. Esther Dyson's annual gathering at the Scottsdale Princess resort in Arizona always features a mix of big money and big ideas (sometimes, big egos as well), in a highly relaxed and convivial setting. Other conferences have come and gone, but Esther's (as in, "Are you going to Esther's this year?") is as steady as Old Faithful and a lot more useful. I've been going since the 80s and regard it as a necessity in my professional life. It's also a lot of fun.
Over the years the meaning of PC has shifted around, from Personal Computing to Platforms for Computing to its current version, Paradigms for Computing. "Who? What? Where? Data Comes Alive" was the theme of this year's show. As always, there was a slight sense of subversion in the theme as well as in her presentations. In her introduction to the topic (in the March issue of her newsletter, "Release 1.0"), Esther spoke in the first-person plural voice of top brass:
Our thesis this year is practical: people want answers, not exotic ways of asking questions. More than ever, money spent on technology needs to be justified. What answers will we get, and what will they do to improve our results and reduce our costs?
In the paragraphs that follow, however, she delivers a series of subversive zingers:
"Under the covers, the techies may be outwitting the pragmatic business guys after all".
"With less focus on what is new new new, customers and vendors are beginning to link together systems that already exist, leveraging the information that is already there and bringing it to life.
"The hard times don't necessarily mean a halt in spending. They do mean very careful spending; vendors and budgeters have to be explicit and precise about the benefits they promise. And this means, ironically, that now is potentially an extremely fertile time for our industry. With less marketing hype, developers are more focused; they don't have to be all over the place. People are driven by passion and clear goals, not by vague visions of glory or IPOs."
Esther likes to locate her interest just ahead of the point where curves start to bend. Hence the name of her monthly newsletter, "Release 1.0". She's interested in changes, movements, originalities. I don't recall whether she covered Linux in the early 90s, but she's managed to work open source into a variety of topics over the years. This year was no exception, with at least two panels on open-source themes.
Over the course of the show's three days, it became apparent to me that free software and open source keep coming up because they have been there, at the perpetual beginning, all along. As Eric Raymond put it in The Magic Cauldron, back in 1999, "code written for sale is only the top of the programming iceberg". Everything below the water line is use-value stuff. Most open-source software is written simply to use--not to sell. This doesn't mean it can't be sold; lots of it is sold, and much of it sells well. We simply need to remember or to discover again (and again) that its first purpose is to be useful and to remain useful.
With open source, and with use-value software in general, we have an old old old that's new new new, no matter what. It may suck for making insanely huge sums of money, but it rocks for making money the old fashioned way: by conserving investments and holding down costs. It lives quietly in the left sides of balance sheets, sustaining and leveraging value. In hard times, putting it to work is one of the smartest things a company can do.
This is a lesson that came up over and over again during the three-day course of PC Forum. Rather than cover all of it, however, I'll focus on the opening exchange.
Esther's first guest on stage was Paul Otellini, President and COO of Intel. The two of them sat at either end of a couch for a relaxed conversation. Her last question was, "What's the story vis-a-vis Linux and Centrino?" When he asked her to explain the question, she said "They claim that you're blocking them from using it." His answer:
Well, Centrino is a desktop/notebook/client machine. We haven't released all the drivers for Linux for our chipsets. It has nothing to do with the processors. It's the chipset drivers on Linux. Part of it's a resource issue. Part of it is just that there has been no demand. There is very little demand for Linux desktops today. Our chipsets tend to get used with other people's sets of drivers. (Garbled) I expect it's more of a resource issue than a philosophical one.
She followed up with, "So will you...?"
To which Otellini replied, "Much as I'd like to know exactly what our schedule is, I don't. But we will put our energy where the market is driving us, so it's not a philosophical issue."
When she asked him to elaborate on PC demand in the worldwide market, he replied:
It's likely we'll see the first double-digit growth in the industry (in some time).... At this point in time the trough recovery is being led by emerging markets. Russia, Asia Pacific. The emerging markets below China. Southeast Asia. India to some extent...have all been very strong throughout the downturn. So it's really driven us to have more of a global presence. I think the industry is still looking for when that corporate refresh happens. When will consumers upgrade their machines? Some of that is driven by obsolescence. Some is driven by economics--enthusiasm or lack of it.
There are half a billion computers in the world at 700MHz or less. Maybe they'll run a browser, but [they're] not going to a lot of applications that consumers like to do--digital everything. They are, in my opinion, an IT manager's worst nightmare. It they're not running XP, which they in general have a hard time running, they will not be covered by security patches. The weakest link in your network environment as an IT manager is that rogue client where someone can get in. And I think information security is absolutely the number one thing that IT managers have on their minds these days. So this will move from a cost argument to an opportunity cost argument fairly quickly.
After he finished, I got up and asked the first question, with an opening explanation:
There are two ways that markets happen. One is you wait for the demand to materialize and satisfy the demand. The other is you invent something that's killer, and the demand follows. By one, necessity mothers your invention; by the other, your invention mothers the necessity. And I think Intel has succeeded largely by doing the latter, over the years.
The desktop is the big hole for the Linux space right now. Linux is killing in the server and the embedded spaces, and there's a big hole in the desktop space. In big companies especially there is a demand for white box desktops, and I hear all the time that they're "waiting for somebody to make it possible". So, I'm wondering why what I'm hearing about demand doesn't square with what you're saying about demand.
His reply was, "What I see about demand is different than what you're hearing. I don't see anything driving, at least IT shops, to bring in Linux on the desktop."
Me: "How about Microsoft licensing and pricing?"
The audience murmured. He continued:
I think places where you see spots that have--government, post office, Germany, the Army, etc. etc.--but in general people are wed to the application base they have. And while there is a great deal of consternation around the cost of running an existing application base around Microsoft, we've gone through this analysis inside our company. We're one of Microsoft's largest customers. It is prohibitively expensive to even consider [moving] over the hundreds of applications we have. It's not just Outlook. It's things we write on top of Windows. The white box phenomenon you see is tied to people using site licenses of Windows to gas-pump their own software onto the machines. It's not only a Linux phenomenon. So, I don't see the momentum that you're describing.
Me: "Can we still expect the device drivers?"
Him: "[Garbled]... people and resources."
Not long before the show, Lindows CEO Michael Robertson wrote an editorial on his company's site accusing Intel of sand-bagging Linux on the device driver issue:
Intel engineers are active contributors to Linux software development and do an excellent job of ensuring that the latest chips and motherboards have solid Linux support. They've sent many products to our certification labs as part of that process, and we're grateful for their support. However, when it comes to packaging those components into complete computers and announcing their availability, strong resistance emerges. It's a classic "engineering vs. marketing" business struggle. The technology-minded folks see a growing trend that is imperative for them to support in order to stay fully relevant in all areas of the PC business. While the marketing-minded individuals are more worried about the risk of upsetting Microsoft....
Intel says that 300 million dollars will go into advertising this new product for mobile computing, but Intel isn't making the small investment to provide Linux drivers. When you see that "Centrino" sticker on the computer, you can substitute "Microsoft Windows XP".
Right after I confronted Otellini, I received an e-mail from a reader:
FYI, I was present at the UK announcement of the launch of Centrino by the Intel head of UK Marketing. It was announced during a WiFi meeting at the Royal Garden hotel in Kensington, London. The only question I asked was, "my business uses Linux exclusively, can you guarantee that Centrino will work with the computers we use?" And [I] got an affirmative, in front of around 10UK tech industry [journalists].
The next day, March 25, word went out from Intel that it was, in fact, working on Linux drivers for Centrino. A spokesman, Scott McLaughlin, said Intel was, in any case, already running Linux drivers in its labs. When the demand arrives, the drivers will be there.
The big lesson for me came with what Otellini said about obsolescence. Here the company's growth-oriented values are utterly at odds with the resource-oriented values of Linux users and of Intel's biggest corporate customers. Big companies have no vested interest in chasing Moore's Law forever. At some point, fast enough becomes good enough. For browsing and e-mail, that level has long since been reached. For multimedia it hasn't, but only a small percentage of corporate needs revolve around multimedia. Most individual workers need office productivity and corporate data processing applications and not much more. At some point customers say "more = less", take their foot off the upgrade gas pedal and hit the brakes.
That's not the kind of demand Intel wants to see. But I have a feeling that's what they're going to be seeing soon.
But there's hope for Intel too, and it comes out of that Asian marketplace, where Otellini said growth is so rapid right now. The whole area already is a hotbed for Linux. If the device drivers are available for the chipsets, Centrino-based Linux laptops inevitably will start to come out of Taiwan. These can be small, lightweight and highly utilitarian--you know, like cell phones. Why run XP when all you need is a few basics. Less = more.
In any case, there still will be plenty of sales in the long run. But in the medium run we're bound to see an adjustment--in awareness of real Linux demand, if not in sales.
Doc Searls is Senior Editor of Linux Journal. His biweekly newsletter is SuitWatch and his monthly print column is Linux for Suits.
Doc Searls is Senior Editor of Linux Journal
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