Saturday, August 25, 2007

Just how many Linux machines will Dell really sell?

I've been reading lately about how Dell is slated to sell just 20,000 PCs with Linux loaded on them. I've seen that number thrown repeatedly into the faces of an uncaring blogosphere by folks who obviously have no love for either Linux or Ubuntu. The source of the number seems to originate from this posting, which was itself quoting in part from an email the poster had received:
We will be launching a Linux based OS (Ubuntu) on the E520, 1505 and XPS 410 starting next Thursday, 5/24. We expect these systems to be less than 1% of our OS mix for the entire year which is ~20,000 systems annually. Please cover the huddle deck below with your team by EOB Sunday. If any questions come up, please let me know so I can address them before launch.

The goal of launching Linux is to continue to give our customers more choices to customize their new Dell. Providing more options to our Linux Enthusiast customer group will hopefully create even more Raving Fans!!
Now there are a lot of questions raised by these two paragraphs. For example, the "OS mix for the entire year" includes what operating systems? Just Windows? Windows and other versions of Linux? And is it across all machines (in other words does number of machines shipped equal number of operating systems shipped)? And how much less than 1% are we talking? Is is 0.9%, or 0.8%, or 0.5%? Or something even far less? And the length of time, is it a calendar year or a fiscal year?

In an effort to determine just how many systems Dell might ship this year, I have attempted to bracket the initial conditions and to find some statistics with regards to Dell's past performance. I want to see where that 20,000 might have came from.

First, let's consider the length of time. Dell's official announcement about selling Ubuntu on their machines was made within the last week of May. My own posting on the subject was May 26, which I tend to believe was the day it came out. So, rather than say that Dell will only sell 20,000 Linux machines for the whole year, it's better to say they expect to sell 20,000 machines for the last half of 2007. If we stick with the 20,000 number then we could say that Dell could sell 40,000 of their machines loaded with Linux within a full calendar year.

Second, let's consider the reach of Dell's efforts. Dell deliberately restricted the number of machines they would ship Ubuntu on, first to three, then several months later to just four. And it was also limited to just the US market. That market was later expanded to Europe. Now compare this to the total number of models that Dell sells across the world. I have some statistics in that area from 2006. In a lone ZDNet article from April 2006, I read that 57 million PCs had been shipped world wide from 1Q05 to 1Q06. According to the article Dell shipped 16.5% of those PCs, or 9,405,000 machines. Assuming that Dell will sell the exact number of machines for the next several years, through 2007 on into Q108, and assuming they were to ship exactly 1% of those machines with Ubuntu installed on them, then Dell would ship 94,050 machines during a full year, or 47,025 from June to December 2007.

So, while my numbers are higher, the 20,000 is certainly within the ballpark. The questions all this raises of course centers around what Dell's starting assumptions where that they came up with the 20,000 number in the first place, and I don't think we'll ever really know.

Regardless of what numbers you use, all the numbers are embarrassing, starting with Dell's basic assumption of 1% or less. I have never really believed that Dell would be successful. I always believed, and continue to maintain that belief, that the effort is a bone being thrown out to the community. I don't fully understand Dell's motivations, but it sure isn't to promote Linux. Otherwise Linux would have been offered as a selectable option on every machine they sell, in every market they sell in. And to rub salt into the wound, consider Apple's performance during the same time period from which I quoted Dell's numbers. Apple, in the same period (1Q05 to 1Q06) had a world-wide market share of 2.3%. That means they shipped 1.3 million of those 57 million machines. I know it's unfair to compare world-wide numbers to a percentage of a single vendor's number, but really. No matter how you slice it, 20K in the first year is pathetic.

If Dell meets that miserable target of 20,000, and there is no guarantee they'll even meet that, then Dell will be completely within its rights to conclude that the effort was a failure and turn it off. For Dell's Linux efforts to truly succeed then Dell would literally have to show a 10-times greater number of computers shipped with Ubuntu. Not double, or quadruple, but ten times (an order of magnitude). Otherwise it really is a waste of Dell's time and money.

And if it does fail, then it will leave a black eye on the movement that no amount of time will ever completely erase. And that, I think, is what this whole effort has been about. Set it up, hobble its scope, and then sit back and see what happens. It will fail, and by direct association so will Ubuntu and Linux. And Microsoft will wind up with a huge PR bonanza in its continuing fight against Linux. This carefully crafted trap isn't aimed at the geeks, it's aimed squarely at the business community and general buyers who are wavering in their commitment to Microsoft Windows. This has nothing to do with merit. It's all about marketing and maintaining market share, even for a convicted monopolist. The coming public failure of Dell's Linux marketing efforts will provide Microsoft with all the heavily documented ammunition it needs to support its position that Linux can't be sold, certainly not as a viable alternative to Windows.