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Forbes Ventures Bold Predictions For IT, Linux 387

Posted by simoniker
from the crystal-ball's-warranty-void dept.
LinuxThis writes "Everyone's favorite, Daniel Lyons and other Forbes journalists have made some bold predictions about IT in 2004. Interesting quotes include 'Microsoft warms up to open source, and tries to make a buck off it', and the best, from our main man Daniel Lyons himself: 'The end of 'free'. Free didn't work for dotcom pet food stores, yet much of the rhetoric around technologies like Linux and voiceover-IP still involves this crazy notion that companies can make money by giving things away. They can't.' Even better, he suggests: 'SCO Group will settle its lawsuit against IBM. Both sides will declare victory. The Linux community will turn on IBM.' This is interesting considering his previous observations about OSS.."
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Forbes Ventures Bold Predictions For IT, Linux

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  • by Raul654 (453029) on Thursday January 01, 2004 @06:29AM (#7851878) Homepage
    ...to anyone, technie or luddite alike, that IBM has a vested interest in seeing this lawsuit through to the end and making sure SCO is crushed into a fine-grained dust.

    Yes, it would probably be cheaper for them to stop short. But that's kind of like negotiating with people who take hostages - you do it once, and it encourages others. Which is why this one is going all the way to the end, and IBM will not settle for anything less than complete victory.
    • by js7a (579872) * <james@b[ ]k.org ['ovi' in gap]> on Thursday January 01, 2004 @07:36AM (#7852003) Homepage Journal
      IBM has a vested interest in seeing this lawsuit through to the end and making sure SCO is crushed into a fine-grained dust

      IBM could hardly care less about SCO's fate. What is at issue here to IBM is the far more important issue of their software systems' legitimacy in the eyes of the market. SCO has done far more damage to that reputation than anything Microsoft could ever dream of, given their position as a clear competitor to both IBM and SCO. Since SCO/Caldera was very much a Linux company, their FUD rumors have had a tremendous chilling effect.

      Now, there is no way to undo that damage with a settlement, as far as I or anyone I've read on Groklaw can tell. Even if SCO admits egregious errors in public, without a clear ruling from a judge and/or jury on the issues of IBM's rightful ownership of their e.g. AIX code, all of IBM's competitors will forever be able to twist the knife in their back. It no longer matters what SCO says or does, because their credibility is only intact with their own investors at this point. IBM, on the other hand, needs to clear their name.

      IBM will not settle for anything less than complete victory.

      ...so of course I agree with you there.

    • So sayeth Raul654:
      and IBM will not settle for anything less than complete victory.


      IBM rarely, if ever, settle's for less.

  • by Anonymous Coward
    I thought the end of free was coming when the tech market crashed.

    Why won't free just end once and for all so these stupid researchers will stop with these inane predictions?
  • Not Exactly (Score:3, Informative)

    by Ashcrow (469400) on Thursday January 01, 2004 @06:44AM (#7851903) Homepage
    It's not 'the end of free' for Linux by any means. Debian, Gentoo, LFS, Slackware (probably) and many others will still be free because of either their non-comercial status or their comitment to the community. After all, who wants to pay a company to use software they wrote? Not me ...
  • by Anonymous Coward on Thursday January 01, 2004 @06:46AM (#7851911)
    Is that what they call a blow torch being applied to the Belly of the Beast these days?
  • by Mmm coffee (679570) on Thursday January 01, 2004 @06:47AM (#7851913) Journal
    It is possible to make money giving stuff away for free, but you have to be very precise about how you do it. You just need to give out enough of your product to make the public want the stuff you need to pay for. A good example of this is the IRL company 'Primerica'. They're a financial managment service that gives out financial evaluations for free. That is, they will take what you make, how much you want to retire off of, how much debt you have, etc and figure out a way to make everything managable and possible. However, they make money off debt consolidation so you can pay off your bills faster, insurance, etc. You go in, get everything sorted for free, and then hopefully you'll get your loans and such from them. They're making a very large profit from this strategy, from what I can tell. Another good example is a band who releases low-bitrate MP3s for download off their website. You get the songs and can tell if you like them or not. However, if you want the versions that don't sound poor with all the case artwork and such then you'll buy the CD.(This is what got me to buy both of Rilo Kiley's CDs.) I've noticed that the reason a lot of these companies fail at selling stuff by giving other stuff away is because they give out the wrong stuff for free. It's like crack - give them just enough to give them the need for your product and you're set. Kinda like Google's expert search. Can search google for free, but if you need help finding that one obscure thing then you can pay to have others with a lot more experience do it for you. I'm rambling. Damn, do I love coffee.
    • by Our Man In Redmond (63094) on Thursday January 01, 2004 @07:39AM (#7852011)
      Air is free, yet people make money from scenting it, compressing it or incorporating it into other products like balloons or ice cream, and selling the result.

      Water is free, yet people make money from purifying it, bottling it or flavoring it, and selling the result.

      Linux is free, yet people make money from packaging it, enhancing it and supporting it and selling the result.

      Linux, like air and water, is free for all, yet through effort and ingenuity one can still profit from it.
    • Primerica comes on like a pyramid scam! They get people to sign on and sell their stuff and sign others on to sell their stuff.. They also tend to be very sly about telling you who they are when doing so.

      Think of Amway for financial stuff--with a wiff of cult. Check them out very carefully.

    • ...that is, before Activation took place. How many copies of Office and Windows from work ended up in the user's homes? And once that bait had been taken, the hook got applied.

      1. You just need to give out enough of your product to make the public want the stuff you need to pay for.

      Another example is The Kompany [thekompany.com]. They had this tactic before and released some products that allowed them to sell add-ons. After some fumbles, they are back at it again with Rekall [thekompany.com] as this site [rekallrevealed.org] shows and as discussed here. [slashdot.org]

  • Fear of free-dom? (Score:5, Insightful)

    by pacamac (692186) on Thursday January 01, 2004 @06:55AM (#7851927) Homepage
    Why is everyone so afraid of the concept of anything being 'free'? Is it that radical of a proposition that a broad-based community can create and support an infrastructure without the need for it to turn into a for-profit corporation? Community WLANs, VoIP, Open Source projects....aren't these things all technologically and socially proven by now? All of these analysts and experts can't be that shackled to the bottom line, can they? Paradigm shift, anyone....
    • by kubla2000 (218039) on Thursday January 01, 2004 @07:15AM (#7851959) Homepage
      Yes, I think they are shackled to the bottom line. They don't appear to be able to grok that the very thing which is now stimulating the economic revolutions and microsoft squeeze in the corporate space is a community project and that it's available "free".

      It seems to me that IBM and Sun have pegged exactly how to "use" Linux. You feed the project and feed off others feeding the project. You then wrap Linux up with non-code-related extras which you sell for a bundle. Any monkey can install Linux on a piece of hardware, but it takes a very skilled monkey to plan and successfully migrate a company from old software / hardware to the newly installed Linux box[es] with minimal disruption to that company's work-flow. The bigger the company is, the more that kind of expertise is valued.

      What the Forbes writers seem to have confused is a paradigm, but perhaps not the one you mean. They're still looking at the number of units Microsoft pushes and the price tag attached to these and then try to compare that ratio to the ratio of units shifted by IBM and the price tag on those.

      I think where they need to be looking is at the services companies who rely on Microsoft and comparing them to services companies like IBM. What's the profit margin for a Microsoft consultancy that comes in to migrate a company from NT to Server 2003? What's the profit margin for IBM to migrate a company from NT to Suse (or, more lately, Redhat)? How many of these migrations are taking place? How long to they take? How much do they cost? What are the support contracts like?

      As long as "analysts" try to compare the "cost" of a Redhat Enterprise license with Server 2003 license, they're comparing fish to rugby boots. The license is not where the game is at.
    • Anything that is free is a threat to capitalism. So the capitalists don't like to allow such things. Forbes, in particular, is run by capitalist elites.

      Sivaram Velauthapillai
    • I could say the same to the GPL people. If you want to free your code don't impose restrictions on distribution. I mean shouldn't free as in in both freedom/beer mean that some company can take your code and use it for a billion dollar project all hush-hush without making it public?

      Sure it may suck but in reality people are still likely to contribute to a project even if it's public domain.

      Tom
      • I could say the same to the GPL people. If you want to free your code don't impose restrictions on distribution.

        Freedom without law and order is not really "freedom" -- and it's worse than law and order without freedom.

        GPL is like the law, with freedom preserved. Microsoft's EULA is like the law, with freedom removed. Spam is the result of freedom exploited.

        Ok. So, honestly, which is more evil: Microsoft or spam? ;-)
        • This is nonsense. I release my code to the public domain because I want everyone and anyone to use it without fear of "Did I comply to his license demands?"

          Heck, even my textbook I'm writing is Public Domain. If another person picks up what I did, improves it and sells it for $$$ hey all the power to them.

          And spam is not a result of freedom. It's a result of greed. That's like saying highways cause high speed chases...

          Not that I don't respect most GNU software. I just fine the GPL itself is kinda co
          • Not that I don't respect most GNU software. I just fine the GPL itself is kinda contradictory. You want software to be free for the masses and you want to ensure that the cycle continues. Smetimes the cycle is not meant to continue [e.g. private development].

            The GPL was not invented in a vacuum. In the beginning, a lot of people had the same naive opinion about freedom as you.

            Then came the Unix-companies and nearly destroyed Unix by creating closed-source incompatible derivates that ran only on expensiv

    • by kfg (145172) on Thursday January 01, 2004 @09:44AM (#7852286)
      It's simple economics. Everything must be assigned a price and the purpose of production and distribution is profit.

      Anything that reduces profits is, by definition bad. Anything that reduces profits reduces the GNP which is, by definition, a social evil.

      If a thing has no price it has no value. Replacing things that have a price with things that don't reduces riches. The more of these things you have the less you are "worth." (As if value only meant "price." The primary value of your house is that it provides you with shelter)

      From the standpoint of economics free software is just looney. That would be like cars just being free for the taking, like leaves on the ground in the fall. Everyone would be poor if they just get what they wanted like that.

      Wealth means buying shoddy things with a high "value." Less stiches, more riches.

      Of course things that are "free" can be used as well. Since the river next to your plant has no price it's fine to use it to dump toxic waste into. Clean water and air have no value because you don't have to buy them. They're just there until you pollute them.

      Now businesses that aren't directly tied to the ideas of the software industry as part of the their own profit or adding to the value of the GNP are now starting to realize that OSS is like that stream next to the factory now. You can just use it. For free. (And maybe pollute it, but that'a another post).

      But if you're in the software industry or an economist the idea of reducing an item that can be produced for free and "sold" (over and over again to the same customer) at usurius profit margins to free as in leaves on the ground is just daft. It can be literally unthinkable.

      Of course from the "consumer's" point of view software is truly a consumable. You buy it. You use it. But you don't have anything of your own for it. Your "worth" is reduced. Then you have to buy it again. The flow of "value" is all one way.

      But from the economic point of view that's a good thing. There is a schizophrenic rift in economic theory between man the consumer and man the producer.

      Everyone's heard about it, but no one these days has read it. Pick up a copy of E.F. Schumacher's classic work "Small is Beautiful." It delves into these very issues.

      Finding a copy of Stephen Leacock's (professor of economics at McGill) "Too Much College" wouldn't hurt either.

      Even the autobiography of G.K. Chesterton has some interesting things to say about the issue, just ignore the religious stuff if you are so inclined.

      KFG
      • I was just talking with friends about this the other day when we were discussing the purchase of a new car. My Toyota Tercel with 135,000 miles on it and a crumpled front fender has a trade-in value of less than $350 (US). My friend said, "ugh, that cars worthless." Well, no, not at all. It gets me to and from work every day, uses a fair amount of fuel, and is paid for. I would put its value far above $350 but I'm not looking to sell.

        Seems to me that capitalism is based on people always wanting more. If pe
        • Yes, it is an axiom of modern economic theory that expansion is necessary. For survival. Not just economically but literally. This, taken to its logical extreme means that we must expand infinately (an obvious impossibility in a finite world, therefore to survive we must go where human survival itself is impossible, like the moon. The metaphysical implications of this are staggering), or die.

          Do not, however, fall into the trap of believing that modern economic theories are all there is to capitalism. At ro
      • Open source makes sense economically. Remember, economics is not solely about monetary value. I was talking with the guy who developed the rotoscoping software (called "rotoshop") for the movie 'Waking Life'. It was at a lecture, and he explained that he didn't want to release the software at, because he didn't want to deal with legal issues, starting a business, tech support, etc. For him, there was value in not having to do all that other stuff. All he wanted to do was code. Unfortunately, I couldn't conv
        • No, economics is solely about monetary value. The economic calculus has no method of dealing with anything that doesn't have a price. Economics has been transformed into what its practioners believe is a science and as such it only admits to mathmatical models.

          Quantity, which in this case means price.

          That's the problem.

          Nowe you and I know that's daft. The value of sharing a beautiful sunset with your sweety is of inestimable value, but no price. Economics cannot even consider it.

          Until DeBeers, Hershey a
      • It's simple economics. Everything must be assigned a price and the purpose of production and distribution is profit.

        . . .

        If a thing has no price it has no value.

        Actually, it's worse than that. Economists will tell you that their field deals with the exchange of (relatively) scarce items. Land is an economic good because there's a finite supply of it. The laws of supply and demand really don't apply to computer software precisely because it isn't a finite resource - your possession of a copy of De

        • Haven't you noticed the convergence between OS and office suite version numbers and automobile model years - 'Windows Server 2003' sounds an awful lot like '2004 Toyota Camry' to me -

          This is why I started calling software "chrome" and "features" "Chrome and tailfins" years ago.

          GM's Sloan wrote the book (literally) on planned obselesence.

          The laws of supply and demand really don't apply to computer software precisely because it isn't a finite resource -

          Which is why the industry can only be propped up
        1. From the standpoint of economics free software is just looney. That would be like cars just being free for the taking, like leaves on the ground in the fall. Everyone would be poor if they just get what they wanted like that.

        That is it in a nutshell.

        To expand a bit: people think that because a company they buy from is doing well, they personally are doing well. This is hooey. I've seen managers who want to develop "relationships" and "partner" with off-the-shelf software and hardware companies when

      • Interesting take. Open Source is a good of the commons, like water. And is subject to the same abuses and subject to the same advantages. If available and viable its an enabler.

        The primary difference of course is that open source code is the result of man hours spent coding, it is a processed product. It is very difficult for alot of people to concieve of a contributed common good. However, difficult as it may be, open source is obviously a reality. There does exist in the common, a base of computer code a
      • Anything that reduces profits is, by definition bad. Anything that reduces profits reduces the GNP which is, by definition, a social evil.

        One thing I think most IT people fail to understand is that Information Technology does not generate revenue, it enhances the ability of other things to generate revenue. The computer sitting on a worker's desk doesn't generate money, it burns it by eating electricity and needing support. However it allows that worker to be more effecient, so they can produce more of a
    • If making money from 'free' products was something relatively new, we couldn't really blame conservative analysts for knee jerk reactions against Linux. However, the concept of making money without charging for your main service is as old as the hills.

      Every other disco has no door charge, charging only for drinks sold. Since the 1970's there have been free advertising papers allow adverts to be placed for free (I used to work for http://www.quokka.com.au); only paper sales are charged for.

      Furthermore,

    • Since you and the article both mention it, how is VoIP free anyways? I'm drawn to it because I'm sick and tired of paying of several companies for essentially the same thing... bandwidth. I'd still be paying somebody, but the total cost would be less.
    • Why is everyone so afraid of the concept of anything being 'free'?

      Idioms: "You can't get something for nothing." vs. "The best things in life are free."

      Software is typically thought of in the first category (an item) not the second (an emotion or personal relationship).

      I've had many people repeat what to them seems obvious but to me is silly; "If anyone can see the code, it is less secure." and "It can't be as good as what is being sold otherwise the people would sell it instead of giving it away." B

  • SUN (Score:2, Insightful)

    by axxackall (579006)
    Scott McNealy and Sun Microsystems: Worth watching, though they may be difficult to see as they sink further and further out of sight.

    No need to be a wizard to see that time for overpriced and underperformed (and unreliable) hardware (and OS) in internet-related business is finished. Today I can quicker deploy several (even dozens) of Lintel boxen running all needed application services distributed, then I did it before with a big 15K or few E4500s. With Lintel I save money in all aspects (cost of deploym

    • Re:SUN (Score:5, Insightful)

      by afidel (530433) on Thursday January 01, 2004 @07:15AM (#7851963)
      "...(and unreliable) hardware" *cough* *sputter*

      I might call Sun hardware a lot of things but unreliable ain't one of em. Sorry but the only x86 hardware that comes close is the top end of the Proliant line and the "mainframe" stuff from Unisys. As far as performance goes remember that mainframes are often several generations behind the bleeding edge and yet most of the worlds usefull computing is done on em, some of the time its about knowing that a job will get done on time, not how quickly it *might* get done.
  • by demonhold (735615) on Thursday January 01, 2004 @07:09AM (#7851950) Journal
    ...if I can get a linux distro that recognizes the bloody luscent driver that came with my a20m thinkpad.

    Now centering ourselves on the topic. I love Linux, but it's still mainly for the computer geek or the Soho user that has time enough to experiment and discover things for him/herself.

    Distros has to center themselves. The fact is that many of them offer too many options and most people are a little bewildered: "Geez I liked it better when it was only Windows, Office and IE."

    On the other hand, the way LINUX has implemented new solutions over the years (USB, Firewire, all sort of mass storing devices, and so on..) it's simply amazing.

    I love the current policy of offering things free for download or very cheap in a package and charging for the know how. When more and more people say to his boss Geez, I like Linux plus OpenOffice better, and the boss adds some figures in his head we'll start seeing things change

  • Who reads Forbes ? (Score:2, Insightful)

    by Krapangor (533950)
    Come on, magazines like Forbes are just low-level MBA entertainment.
    Real buisness people don't read articles how this or that develops: they just getting their work done right first time.
    No real entrepreneur cares about Forbes etc.
    • I don't know any executives and have no idea how they spend their time. But are you sure these guys don't read business magazines and stuff? I think businesspeople DO read things like Forbes, Wall Street Journal, BusinessWeek, The Economist, etc.

      Those sources are where they get their ideas and strategies. Where do you think they get their strategies like downsizing, outsourcing, mergers & acquisitions, and so forth?

      Sivaram Velauthapillai
    • Come on, magazines like Forbes are just low-level MBA entertainment.

      True, competent executives concentrate on specific trade magazines. Unfortunately, Forbes is a trade mag for the truely huge and for people responsible for investing company money and retirement plans.

      Forbes is poor quality next to the Wall Street Journal, New York Times, Economist and all, but it's still read. The dumbass who's dumping your 401k money into Microsoft gets the idea from places like Forbes. That Microsoft desktop at the

  • Morons (Score:5, Informative)

    by arvindn (542080) on Thursday January 01, 2004 @07:18AM (#7851969) Homepage Journal
    These financial worms and suits are, almost by definition, too stupid to understand that free means freedom and that linux is a technology, not a product, etc. So we invented the buzzword open source. It helped, but now its abused left and right and MS wants to jump on the bandwagon by showing parts of its source under an NDA which you can't even compile.

    The shills at Forbes are so obsessed with money that they have no understanding at all of the technical aspects of SCO vs. IBM, and live in a reality distortion field. Remember the outrageous article that called linux users terrorists? And of course, the "Linux's hit men" article showed that the author is unable to perceive the difference between GPL and public domain. These people are mentally retarded, there's nothing else to describe them.

    If they were dealing with an entity with lots of money they would likely have been sued for libel or whatever, but since its a community they can take their liberties with their "analysis" and "predictions". When I looked at Truman holding up a copy the Chicago Daily Tribune [uncp.edu] making fun of the analysts' predictions (in the recent cell phones article), I realized that this is perhaps what we need. And in fact, slashdot could be the ideal vehicle for that. What I mean is, if we had articles laughing at them and ridiculing them and exposing their idiocy every time one of their tech "predictions" went hopelessly wrong, and if some other news outlets picked up on it once in a while, then may be it would knock some sense into these morons' heads.

    • Capitalists are never wrong. Forbes is run by some of the top capitalists in the world.

      If you assume that, you'll live a happier life...

      Sivaram Velauthapillai
      • Agreed. They are right with little money like the .com.

        The difference is the money is not required to make Linux and OSS grow. If your whole .com was funded by stocks and they are used to pay employees, guess what happens when they go down? They cut into operations and people leave if they can not get paid.

        Volunteers and a few paid engineers make Linux. It will always exist.

        Forbes see's bright things for Linux and mentions how it might never make alot of money. Both are true. I mean lot as in Microsoft,
        • But Linux will make loads of money, its just that the money won't be made in the development process (not as much anyway) or by selling almost empty boxes with a CD in them, but in the savings companies see in off the shelf or custom solutions for software to run thier business.
          • Linux won't make much money compared to what MS has made. The MS price is created by creating an artificial scarcity, and then extorting the money from those that need the product. The Linux price is created by selling in a market where the goods are freely accessible to anyone who wants to take the effort of making them. The first way will make the monopolist more money, at the cost of removing it from the customers. The second way will allow efficient distribution of goods.

            Monopoly is always an bad c
      • Capitalists are never wrong. Forbes is run by some of the top capitalists in the world.

        You certainly seem to be down on Capitalism in your postings. (Of course, few people actually understand what Capitalism actually is.) So what is your favorite "ism"?
  • by MysteriousMystery (708469) on Thursday January 01, 2004 @07:21AM (#7851973)
    Another ridiculously bad prediction in his article (unrelated to OSS but I'm sure willl be fascinating to slashdotters) is his final bold claim of "To repeat last year's prediction: "In 2004, Nintendo will have followed Sega's lead by exiting the console business." In 2004, it will." This guy obviously doesn't pay much attention to any sales numbers outside the US where Nintendo is well ahead of Microsoft in terms of console sales worldwide. In fact Nintendo was close to getting caught up with MS in North America but a shortage of Zelda bundle Game Cube's towards the late stages of the holiday season caused a slight drop in sales. He's just trying to make a lot of US corporate friendly predictions get people talking, he either doesn't believe what he is saying or is simply looking for attention. A lot of it is pretty ridiculous.
    • by hkmwbz (531650)
      There is obviously something wrong here. He even contradicts hiself:

      "PlayStation Portable will fail to make significant inroads against Nintendo's Game Boy. The handheld gaming market is huge--the Game Boy Advance outsells all consoles combined"

      Then:

      "In 2004, Nintendo will have followed Sega's lead by exiting the console business"

      So Nintendo will keep its dominance in the handheld console market, but they will also exit the console market?

      Hello? Handhelds are also consoles!

      I'm sorry, but where

  • Big mistake (Score:4, Insightful)

    by Our Man In Redmond (63094) on Thursday January 01, 2004 @07:34AM (#7852001)
    The end of "free," huh? So, the way I read this, just because someone failed to make money off of an untenable business model, the people who make and use Linux, who weren't doing it for money in the first place, are going to fold up their tents and head off into the desert?

    The more I read pieces like this, the more I think that people like Lyons are just plain incapable of "getting it." Their world view just doesn't allow for people doing a large-scale project like Linux because they enjoy it, and doing such a good job of it while they're at it. So, they try to map what the FOSS community does onto their world view, and it's hardly surprising that the mapping looks pretty strange to us.

    Ah well, the FOSS community will continue to do what it's been doing all along, irrespective of what people like Dan Lyons thinks of it. Happy New Year.
    • Remember, "free" in free software means "freedom". It's super-ironic that someone would declare the end of "free" -- it shows where his head is at.

      Maybe the companies making "free" software should spend more time remembering that it means "freedom" and they'd make a buck as well. People always gravitate to the better mousetrap.
    • His last article made him look like a shill, but it also sheds light on his world view. He tried to scare the business community with an image of FSF lawyers enforcing the terms of the GPL. That businesses, school districts and individuals have much more to fear from Microsoft's invasively restrictive EULA and the BSA, seems imposible for him to realize. He must not know that Microsoft demands read access to his PC or realize the business implications of that. He must also think that people don't really
  • "Microsoft warms up to open source"

    I'm sure this is all MS FUD, with their "Shared Source" initiatives giving it to a privilaged few, it seems that Microsoft is even less willing to give away their precious source code these days.

    To quote bill gates: "To all those open source types who came down here looking for my code, I have only five words for you: From my cold, dead CVS."
    • To quote bill gates: "To all those open source types who came down here looking for my code, I have only five words for you: From my cold, dead CVS."

      I think if Bill Gates was to say it, it would rather be "From my cold, dead Visual SourceSafe".

  • A mixed bag this (Score:5, Insightful)

    by Ashtead (654610) on Thursday January 01, 2004 @07:48AM (#7852028) Journal
    5 bold predictions, indeed. Let's look at some of them:

    1. Lisa DiCarlio: More cash-rich tech companies start to pay dividends. Microsoft continues to struggle to make its software secure, which means another great year in 2004 for Symantec. The complexities of integrating Legato and Documentum weigh down EMC. HP's stock doubles. IBM buys SCO to shut it up.

    These don't look too far-fetched except for the last one. If anything I've seen on groklaw has any connection to reality at all, IBM will fight to the end in this particular battle. Score 0.7 tempered by a -1, Unlikely...

    3. Daniel Lyons SCO Group will settle its lawsuit against IBM. Both sides will declare victory. The Linux community will turn on IBM.

    IBM vs SCO as before, IBM will not stop at anything less than full victory. And IBM as the new enemy? Whatever would have happened to Microsoft then? He might be seeing something I do not see of course, it just seems too unlikely. Score 0.2

    4. Victoria Murphy: Microsoft warms up to open source, and tries to make a buck off it.

    Much as I'd think that would be a smart move on MS' part, I am not sure if they can leave their current closedness behind in time. To them it would be a big change. Maybe this explains what happens to MS in the previous prediction. Score 0.6, I Wish it Were True.

    What does concern me is that some managers may read all of this and not realize it is all matters of opinion.

  • by jwbrown77 (526512)
    IBM employs legions of full-time attornies. SCO has to hire so many that (allegedly) it's the reason why they lost money last quarter.

    IBM doesn't stand to save much money by settling, if any. And by not settling, they have the benefit of crushing this lingering nonsense about SCO in the minds of many PHB's who would be hesitant to buy IBM's Linux products, no matter how unjustified.

    I have to wonder who the heck this Lyons guy is. He acts like he has his fingers right on the pulse of the Unix/Linux/
  • lose sight of the fact that Linux isn't the one that isn't ready, it is the distributors who aren't integrating the various OSS projects with in a consistant manor. They're the source of the problem.

    When you pay for Red Hat Linux, you don't pay for the software but for the time and investment the likes of Red Hat make IMPROVING the bundled software and ensuring that there aren't any issues when running the software in tandem with other pieces of software.

    In otherwords, the distributors are like a resturan
    • Just look at Red hat, they refused to pay a piddly $10 per-unit fee to SUN for the ability to bundle StarOffice 6/7.

      Piddly?!?!?! It was one-tenth the cost of their entire distribution (when they were selling to end-users). It probably nuked their entire profit margin.

    • Why do you feel that a distribution should include an extra-cost word processor?

      Especially a distribution that is aimed at the server market? (Red Hat has had a lot of desktop systems, but that's NOT their target audience.)

      Debian would refuse to include StarOffice because it's non-free. This is correct for their goals and purposes. But it's also correct for Red Hat to refuse to include it as an extra-cost option (i.e., something that raises the cost of the distribution) when it's not appropriate to the
  • WTF is this guy smoking? (And can I have some please?)

    IBM has right on its side AND fabulously deep pockets, whereas SCO is quite likely to implode in another quarter or two, since it has *no* seriously marketable products or services (and seems hell-bent on doing everything it possibly can to scare and/or piss off any potential new customers, to boot). Big Blue can well and truly afford to wait SCO out.

    IBM has every reason NOT to settle the suit, and every reason to pursue it until SCO is a glassy, smoki
  • by theolein (316044) on Thursday January 01, 2004 @08:48AM (#7852147) Journal
    I predict that Daniel Lyons will, after continuously having made completely false analysis and predictions on everything from SCO to Linux, either lose his job at Forbes (watch that MBA smile dissappear in a split second when he gets the slip) or be moved to the comics section, where he will at least do somethiing productive at Forbes.

    I see this guy (and most other so called tech analysts for that matter) as one of the worst things to ever happen to both markets and journalism. This is one of those people who were still pushing the dotbomb revolution when it had already collapsed, and then, in true two faced lying son of a bitch sell your soul marketing fashion, turn around and say they had seen it all coming and that people are dumb for not having listened to him.

    I think that the best remedy for scum like this would be to actually give them the job of ceo of some tech company and see how long it takes them to run it into the ground.
    • I think that the best remedy for scum like this would be to actually give them the job of ceo of some tech company and see how long it takes them to run it into the ground.

      Representatives of the collective slime known as "Wall Street" are indeed running many large companies into the ground. Large investors do show up at board meetings and, worse, private meetings, to offer detailed advice on how to run the business. At the big dog level, some of it sounds reasonable and all of it is taken seriously becau

  • Anyone?
  • Curiously enough, the imho most precise, educated and arrogant-bullshit-free predictions come from a woman.
    On second thought, maybe not that curious at all.
  • The Linux community will turn on IBM

    A few guys in need of a shower and a suit can hardly be described as the Linux community. Unfortunately, Daniel Lyons didn't elaborate on it. What will change after SCO vs IBM that will get either side to start sniping at one another?

  • by G4from128k (686170) on Thursday January 01, 2004 @09:24AM (#7852240)
    I see five conditions under which the free model can work.

    1) Price insensitive customers: "Free" can work as long paying customers are tolerant of paying higher prices to support the cost of providing some level of free product or service. For every "free' customer (e.g., who does not pay for the bandwidth & IT to provide the download) there must be a paying customer who is willing to make up the difference. If two companies are equal in quality and features of the product and service offered but one company is "giving it away for free", then the free company will have extra costs from offering that free product/service and have to charge higher prices. If customers are very price sensitive, they will eschew the company that offers "free" wares and pay lower prices at the non-free company.

    2) Low total cost of "free": The unreimbursed cost of the free product or service must be low relative to the revenues generated by paying customers. This occurs under a combination of two subconditions. First, the marginal cost of the free product or service might be low (e.g., the modest cost of bandwidth). Second, the fraction of freeloading customers might be low (e.g., something prevents everyone for taking advantage of the free offer). The lower the marginal cost, the higher the tolerable percentage of freeloaders.

    3) Customers who contribute services: The viability of free is enhanced by service contributions from customers. Thus the definition of a paying customer goes beyond money -- some customers provide valuable services in the form of code contributions, beta testing reports, and support on discussion forums. These contibuting customers provide a voluntary service in exchange for the "free" product. Although such customers do not help pay the bills, they do reduce the organization's costs (eliminating salaried programmers and helpdesk personnel) and they increase the value of the organization's offerings (thus justifying the payment of subsidies by paying customers).

    4) Nonconfident customers: If customers are not confident of their choices, they may prefer the "free" model as a way of try before you buy. At some level many proprietary software companies do this by offering "free" trial versions of their software. The companies give away a time or function-limited version of the product and get paid for the full/unlimited version of the product.

    5) Obligatory follow-on purchases: "Free" can also work if acceptance of the free product obligates the customer to buy additional products or services down the road. Giving away the printer in order to gain an ink cartridge customer is a good example of this. The challenge, for the provider of the "free" item, is to segment the customer population to ensure that only heavy users of ink cartridges, for example, will accept the offer of a free item (maintain a low percentage of freeloaders who take the printer but don't use it much).

    These are neither mutually required, nor mutually exclusive conditions. Some combination of all 5 can ensure the viability, even the superiority, of the free model over more pay-for-what-you -get business models. I'm sure others here can think of other conditions that enhance the viability of the free model.
  • Maybe I don't know lawyer-speak, but to me "SCO will settle it's lawsuit against IBM" implies that SCO is the party that can make a decision to settle here. At this point, they can decide to drop the suit. They can't unilaterally decide that IBM will settle the lawsuit.
  • well, these "predictions" are by those who call themselves journalist and/or analyst, so no one should take their words seriously. they belong to the species responsible for last year's SCO share boosts, made possible by irresponsible comments on everything they could come up with. their job is to make smoke out of nothing. fuck 'em.

    I rather believe what Miss Cleo says.
  • Tell me, Mr. Lyons, how is Linux going to not be free? Are _YOU_ going to tell the people who wrote the code what they can and cannot do with it?

    What about the code *I* have contributed(not to the kernel itself)? How is _THAT_ not going to be free?

    What about my own projects which I have released for free under the GPL?

    Mr. Lyons, the code belongs to _US_. Please rid the world of your stupidity, in any way possible, you worthless fucktard.

  • The notion that you can create profitable companies around giving away free software was some notion hyped up by clueless business magazines like Forbes. That was all a sham, like so much of the business trends Forbes hypes up.

    Free software and open source software does not make money by itself. It merely helps existing, profitable companies lower their expenses. And there is some opportunity to make money with free software related services--good enough for a decent living, but not the stuff that will
  • by pitr256 (201315) on Thursday January 01, 2004 @11:59AM (#7852717) Homepage
    I've actually read in a couple of places in the last week how SCO and IBM will settle.

    Isn't it interesting to see SCOX supporters like Lyons now claiming that this will be settled out of court? Why? Because SCOX has no fscking case? Even Lyon's realizes that they have no case and they can't keep making threats with nothing to back them up. Hell, they even threaten their own customers? This is not a normal company. It deserves to be wiped out.

    It's like the fight scene in Monty Python's The Holy Grail with King Arthur and the black knight who has his legs and arms chopped off and says, "Shall we call it a draw?"

    And then as we walk away, you can here in the background, "Come back you pansy! I'll make the LGPL illegal next!"

  • I thought it would be fun to copy their format and see what I could come up with:

    The Big Trend

    Companies will continue to demand lower cost IT services and will put the squeeze on suppliers to provide lower cost products that deliver quality "core services" but have fewer bells and whistles that the companies rarely use. In search of lower cost, quality software forward thinking companies will turn to open source software to meet their day-to-day operating needs.

    The Unconventional Wisdom

    Companies wi


  • A lot of IT companies have cut costs during the downturn by shutting down plants and turning to contract manufacturers. But some of those arrangements are going to turn sour.


    Great job Ms. Cleo. That would be like me making the prediction "many people will buy cheap cars in 2004 to save money - yet some will regret their choices and wish they'd spent the extra money".

    Sign me up Fortune!
  • I can only assume that idiots like Lyons never had an Econ 101 class. I learned this in high school, then again in college. It's this simple: over the long term, the cost of an item will be pushed down to the marginal cost to produce exactly one of those items. In other words, if I spend $5M to produce a factory to make chocolate bars, but my actual cost to produce just one bar is 10 cents, then 10 cents is where the price will end up, hopefully after I've paid for the $5M.

    Now, there are ways to "cheat"
  • IBM, Linux (Score:3, Informative)

    by vacuum_tuber (707626) * on Thursday January 01, 2004 @01:04PM (#7853064) Journal

    I disagree that IBM will settle with SCO. That prediction is just plain silly.

    I do agree that the Linux community will turn against IBM, not not for any reason Lyons would be able to see from his relatively technology-free writing cubicle.

    The Linux community will turn against IBM after the SCO dragon has been laid waste and after the community figures out IBM's model for making money from Linux. There aren't too many mysteries in the former, but the latter seems little understood. Yet.

    IBM is making money right now from Linux, not by charging for Linux itself (although they slipped recently and wrote of "licensing Linux" in the same terms as their oldline OSs, a Marketing brain fart, no doubt) but by charging the user for permission to use the CPU.

    How can this be? Don't you own the CPU?

    Well, yes and no. If it's a traditional IBM PC or pre-pSeries RS/6000, yes, you own the CPU(s) and you can run any free software you can manage to load. If you look carefully, though, you will notice that such straightforward platform designs are disappearing from the IBM landscape.

    The trick lies in the mainframe-izing of unix and Intel chips as they are packaged and offered by IBM, following a very old model that has served them well since the 1950s. Imagine a PC for which you have to pay an annual proprietary BIOS license and you'll begin to see how this works. Sure, load any OS you want, but you can't load and run it without the help of the BIOS, and the license fee you'll pay for permission (and software) with which to do that will be based on the OS you want to run. IBM is not going to allow itself to be trapped into competing in the commodity server box market.

    In the 1950s, when punch card machines were all the rage, IBM didn't sell them to customers -- they rented them. Your punch card machines would be delivered chock full of features, mostly in the form of expensive relays hidden under the skirts, but the Customer Engineer would install and remove jumpers to disable any of the features you weren't paying to use. The profit margins were so high that even in those days of super-expensive hardware the fact of millions of disabled relays sitting unused in customer machines was a cost IBM was easily able to absorb.

    The way this translated to IBM's mainframe scheme, which they are now moving to the "new" RS/6000 -- the pSeries platforms -- and others, including the Intel-based "z" machines, is to surround the processor(s) with a complex of hardware and software such that you can't gain access to the CPU(s) without licensed IBM software that is separate and distinct from the OS. What it boils down to is that yes, you can buy the CPU(s) but no, you don't have permission to use the CPU(s) without paying recurring license fees exclusive of whatever, if anything, the OS may cost.

    Right now you can run Linux on monster S/390 mainframes, but not for free. In the S/390 world you have to pay for a license to use each processor in a S/390. How much you pay depends on the value IBM has placed on the use to which you want to put the processor. It might cost $250,000 to "open" a processor for MVS but only $125,000 to "open" the same processor for Linux. To the Linux community member unfamiliar with IBM's mainframe business model this may seem like cause to retch and reach for the barf bag, but for mainframe customers well-accustomed to paying Big Bucks to IBM for everything, including the time of day, it's an incredible bargain.

    With the introduction of the pSeries platforms ("pSeries" is not just a new name for the RS/6000 line), IBM's mainframe business model has arrived in the PowerPC unix server world. Same for IBM's Intel-based "z" platforms. The older RS/6000s will be orphaned as IBM drops support for them

  • by Animats (122034) on Thursday January 01, 2004 @03:08PM (#7853909) Homepage
    Even if IBM settles with SCO, it's not over. There's other litigation. Red Hat is sueing SCO. There's an injunction against SCO in Germany. And sending out DMCA notices to Fortune 500 companies is sure to result in litigation.

    There's going to be a break in the case this month, though. The judge gave SCO 30 days to state exactly what the supposed "infringements" are. Those 30 days run out on January 12, 2004.

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