Intel® Linux™ versus Microsoft® Windows

I once enjoyed life as an executive, especially the conceptual aspects of the game. During one phase, we used to discuss vicious cycles which led to living in a box. We needed to think outside the lines. We also discovered that the instructions on how to get out of the box were written on the outside of the box. That riddle created Satori which brought about innovation.

Andy Grove used to contribute to the global conceptual conversation with terms like recognizing an inflection point. He seems to have schooled his pupils at Intel well. They know the intricacies of finding a vision, aligning on outcomes and disseminating their discoveries.

This leads us to one of Intel's significant discoveries on how to grow their business without Microsoft's governance. Thinking outside the box, they have gone into large populated areas of the globe with little to no PC adoption and set themselves up to sell more products than ever before.

You might find it a brilliant strategy. Intel opened technical hubs in China, India, Brazil and Egypt. Originally, Intel called these "platform definition centers" and promoted them as their commitment to the global channel. They discussed how they assisted OEM manufacturers in these locales in creating opportunities.

So far, Intel doesn't seem to pose a threat to Microsoft's dominance in the global desktop market. But if you dig a little deeper, you'll discover in certain markets, Intel may have escaped Redmond's grasp and dominance.

A document titled Government-Assisted PC Programs and Open Source Software: Lessons from the Intel Experience starts with an interesting subtitle:

Learn how Intel's experience in helping policymakers, technology vendors, and software developers design Government-Assisted PC Programs and its history with the Linux* community offers a unique perspective from which to comment on Information and Communication Technology policies.

Wait just a minute. Did you read what I just quoted? Intel has experience in helping design Government-Assisted PC Programs with Linux? That's not exactly what they wrote. They wrote that they assisted technology vendors and software developers. OK, that shouldn't run against the grain of Microsoft.

If you look at the quote they also included policy-makers. Would that include people like Sergio Amadeu of Brazil's Information Technology Institute or Ma Lin of the Beijing Municipal Science and Technology Committee? What other policy makers has Intel helped and how?

If we read a little further into the document we see:

Intel has experience helping policymakers, technology vendors, and software developers design GAPPs that advance ICT [Information and Communication Technologies] development. The company also has a long history of engagement with the Linux community and supports standards groups including the Free Standards Group (FSG), the Linux Standard Base (LSB), and Open Source Development Labs (OSDL). Intel engineering has contributed to a range of open source projects, including the Linux kernel. Intel's experience affords it a unique perspective from which to comment on ICT policies, particularly as GAPP- and Linux-related trends intersect.

The document goes on to explain detailed information of how to set up a GAPP and what pitfalls to avoid. It gives further information of the types of programs people can use. Like:

The case for GAPPs is straightforward. As an ICT foundation is built and citizens become more technology savvy, a country boosts its productivity and competitiveness. Efforts to lay this foundation usually begin by identifying a GAPP target population segment:

• In Employee Purchase Programs (EPPs), employees lease or purchase computer equipment through their employers.
• In Student Purchase Programs (SPPs), students or parents purchase computer equipment through their schools or universities.
• In Industry- or Demographic-based Purchase Programs (xPPs), an attempt is made to provide ICT to specific sections of society or groups of people — rural residents, impoverished urban residents, or organizations representing disadvantaged people.

Identifying a target population is only half the story. The people intended to receive the GAPP’s ICT benefits often must be given a reason to participate in the program. Generally, one of three incentives is used:

• Direct payment — the government discounts the cost of purchasing a PC by distributing vouchers or rebates.
• Lease and individual tax incentive — employees receive tax relief if they lease or purchase a PC through their employer. Tax relief may be offered by pre-tax payroll deductions to buy a PC or by elimination of ICT-related sales taxes.
• Combined business and individual tax incentives — a business might first deduct the cost of PCs purchased for an EPP. Then, an employee might subsequently get a tax break when buying or leasing one of these PCs.

Perhaps the most telling sign of Intel's strategy comes when the document states that:

Some expect the Microsoft Windows* market share, today well in excess of 90 percent worldwide, to erode in the coming years. Market share for Mac OS X* is expected to remain flat and demand for every other non-Microsoft desktop operating system is expected to dwindle. So Linux, already the fastest growing desktop operating system, is poised to continue making desktop inroads.

Intel walking on the edge of a sword?

My experience with both companies shows that Intel has a significant edge over Microsoft in every area of technology. If Intel sees Microsoft's market share eroding, then they will flow with the trend and speed it up to benefit their shareholders. To grow their business, Intel will also go where people don't want Microsoft trying to run their governments. Or as a petition in Brazil says:

Disagreeing with the policies of the Brazilian government in defense of free software - which is bringing to an end the market reserve of Microsoft for the purchase of software and government computers - the company is launching an offensive to try to intimidate the Brazilian government...the monopoly began criminal proceedings against the Brazilian government official responsible for the deployment of free software...

Some countries will not allow Microsoft to try to run their governments unlike the US or the European Union. In the long-term, many analysts, including me, believe Microsoft will become irrelevant. But today, Intel depends on Microsoft. Even a hint of Microsoft changing horses could hurt Intel significantly. For example, Microsoft could give Dell the OK to use AMD processors.

Intel picking up steam

In the article about Intel offering low-cost PC's in rural China published yesterday, we showed how the platform definition center has turned into a full-blown business.

Intel is offering an affordable computer in rural areas of China. In context of the entire document, the product sells for $350 using an inexpensive but high-quality Intel processor, with an expected take rate of 73 percent. The originator of the document believes that they will sell hundreds of millions of units. The operating system marketed with the product uses an unnamed distribution of Linux.



...To help ensure that PC ownership is simple and painless, the Beijing government is setting up 4,000 one-stop rural IT centers that offer sales, training, and customer service.

Intel has also established a Client Linux Resource Center. You can find a remarkable amount of information about Intel and Linux at the site. While examining the site, I found extensive information below the fold. For example, on a page called Open Source Resource you will see:

You've decided you want freedom of choice for your software solutions, and Intel is here to help you succeed. Whether you are a business, a government agency, educational institution, software developer, or Intel channel member, here is where you can find information about Intel® platforms, Linux*, and open source software.

Topics covered extensively include:



* Proven Business Solutions
* Reseller Center for Linux
* Intel® Software Development Products for Optimum Performance
* Code for Developers
* Expand Your Knowledge with Intel® Software College
* Take Advantage of Technical Resources
* Projects Available Today
* Intel Community Forums

On the Intel Client Linux Resource Center page, you will find a variety of tools. For example, one of those tools allows you to download quick start kits. The website shows:

Intel® Quick Start Kit v1.3 for Linux*
The Intel® Quick Start Kit for Linux* is a PC platform kit that is designed to simplify integration and enable the development of high quality, stable, PC Linux solutions.



Order your free complete kit



Download now



* CS2C*: NSLDT 2.0.1, NSLDT 2.0.2
* Debian*: v.3.1 (sarge)
* Mandriva*: Discovery/LX 2006, PowerPack 2006, PowerPack+ 2006
* Novell*: NLD9, NLD9 SP1, NLD9 SP2
* Red Flag*: RFLDT 4.1, RFLDT4.1 SP1, RFLDT 4.1 SP2
* Red Hat*: RHDT3U3, RHDT3U4, RHDT3U5, RHDT4, RHDT4U1



If you are an expert user, you may also download individual Linux* Drivers for Intel-based PC Platforms.

Intel has invested significantly in their Linux initiative. They have approached the market correctly by cooperating with Governments in India, China, Brazil and other countries. They have put money to work in those places so that the countries involved become self-sufficient.

In China, the PC's Intel makes are high quality, low priced units. For example the system in rural China costs $350 and has Linux as the "user-friendly" OS.

The press in the United States has missed the boat. Intel has contradicted the Microsoft story and is proving Linux works. In doing so, we believe Intel has found a way out of the vicious cycle of Microsoft's world.

What's next?

Perhaps we should ask, what's left? If what we see in China works and we have no reason to believe it will not, Intel stepped out of the box. Not only would they free themselves from Microsoft, they could become the dominant global PC market maker. That would free Intel from the demands of HP. Dell, IBM and others. They could allow AMD to become Microsoft's best friend as Redmond becomes irrelevant over the next five years.

In August 2005, Intel made an announcement that got little of the explosive press attention that generally accompanies significant technology events:

Bill Siu, vice president and general manager of the recently formed Channel Platforms Group announced that the worldwide headquarters of the Channel Platforms Group will be located in Shanghai, China.



He stated:



"Emerging markets are a growth engine for Intel, and China represents our largest opportunity for PC expansion," said Siu. "Shanghai in particular, is increasingly becoming a major hub for the IT industry. The establishment of platform definition centers around the world and the selection of Shanghai for our group's headquarters underscore our commitment to increasing PC literacy across the emerging markets, as well as driving IT growth worldwide."

While quietly, Intel extricates itself from the grip of a partner who believes it has an entitlement to everything in the world.