There is a huge potential market for OS X in business, where
Unix is strong. This article looks at Wintel problems from the Unix
standpoint. Next week's article will look at IT departments, the other
Unix vendors, and the opportunities for Apple.
Microsoft's problems
Microsoft has real problems in penetrating the Unix stronghold of
the large systems market. Windows doesn't scale well, currently lacks a
64-bit version, and has an appalling record for security. Until
these problems are sorted out, major organisations will steer clear
from deploying their critical systems on Windows.
Indeed, Microsoft's bad reputation for security is likely to derail
.NET. Companies won't pay the Microsoft tax unless they feel
transactions and systems are secure. Perhaps Microsoft has realised
this, and this is behind the announcement that they will examine their
millions of lines of code for security problems.
If, after they announce their review is complete, security bugs
continue to appear regularly, Microsoft will lose much of what
credibility it has in this market. In the meantime not many companies
are likely to deploy new systems based on unproven and probably
insecure technology when they know the systems will have to be changed
or updated in a matter of months.
This lack of security shows up in the widespread viruses in
the Windows world. For companies these are costly to eradicate whenever
they get a foothold and, if they are malicious, expensive in terms of
replacing lost work and lost files.
IT workers also have to install security patches on Windows servers.
As these patches are issued frequently, most IT departments are trapped
between the large expense of continually updating large numbers of
servers or the potential cost of dealing with a major problem if the
patches aren't installed.
Microsoft is also annoying companies with XP pricing. Most companies
like to deploy a single version of an operating system or program.
Then, a few years later, when there have been significant improvements
(from the company's point of view), they will upgrade. Many companies
currently skip versions and buy licenses when they want them. This
reduces software costs and staff time spent upgrading systems.
With XP, Microsoft is charging a yearly levy on the number of
licences. The charge includes the upgrades for Microsoft's PC software,
but where companies don't continually upgrade software it will be -
surprise, surprise - more expensive.
This XP levy is making more companies look seriously at Linux. They
already have the hardware, but few, outside technical areas, will
accept Linux as a desktop replacement for Windows. Linux should,
however, continue to make gains in the server space.
Remember that although Microsoft has problems, these are only
problems limiting growth for the next year or so. Nothing is going to
stop Microsoft growing its cash mountain and acquiring companies in
strategic areas whenever it feels it needs them.
The Justice Department, under the current US administration, has
already shown that it has no wish to hold Microsoft back.
Intel's problems
In the 32-bit market, Intel is successfully pushing the MHz envelope
with their Pentium 4. Its chips have now reached 2.2 GHz and the
roadmap shows speed increases for the foreseeable future. It owns the
x86 desktop and the low end server markets. Its only successful
competitor is AMD.
In the 32-bit market, margins are tight on chips for consumer PCs
and standard desktops, which are fine for most commercial users, and
the markets for the latest high performance chips are limited.
Intel wants to take over the 64-bit market. It has gathered an
impressive bunch of OEMs: Dell, HP, Compaq, IBM, SGI, NEC, etc. The
problem is that few organisations want to buy the Itanium.
According to Gartner, in the quarter ending September 30 only a few
thousand Itaniums were sold through to customers. Most of these went
into two 1,000 processor systems sold by IBM. Sales figures for the
following quarter suggest that under 5,000 Itanium-based workstations
and servers had been sold.
Intel has tried to gloss over this by suggesting Itanium is for
evaluation (after an estimated expenditure of $1bn+) and that McKinley
(scheduled 3Q02) is when the mass buying of systems will start.
Although the Itanium clock speed is fine, customers buy Unix systems on
overall performance. In this area Itanium was generally rated
below the OEMs proprietary chip ranges. As the Itanium was only
marketed with various Unices and is, from the customer's viewpoint,
version 1.0 of the chip, they clearly felt Itanium was not
suitable to replace existing workstations and servers.
When the 64-bit version of Windows appears on McKinley, the Windows
groups in IT departments will also be a market. But will they really
want to go with v1.0 of a new Microsoft product?
According to a recent San Jose Mercury article there is a skunkworks
project in place, just in case the stampede doesn't happen. Intel would
then look at using a similar 64-bit approach to AMD, running the 32-bit
Windows code native instead of emulation. These alternatives won't be
in place before 2003. Then the OEMs will need to decide whether to go
with AMD, with Intel, or if it makes more sense to continue with their
own proprietary chips for the time being.
If McKinley fails to gain enough sales, Apple is likely to have
little new competition from the Wintel world for the next 12-18 months
in establishing Mac OS X machines as workstations in the Unix
market. 
Next week: IT departments, other Unix vendors, and Apple's
opportunities.
