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Unlocking The Future: Open Source Opportunities In Custom Systems

How is Linux driving custom builders sales? What makes this OS attractive? How can a VAR mmake money in a "free" OS? A look at services and ancillary income VARs can make in the Linux world.

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Microsoft's name brand dominance, however, still plays a limiting factor, and breakthroughs in vertical markets remain marginal.

"As far as going out and promoting open source for the broad base channel, the reality is the 90-odd percent of the industry buying and selling PCs want Microsoft on it," said Steve Maser, director of product development and marketing at Seneca Data, a custom system builder based in North Syracuse, N.Y. "There is a known user interface in Microsoft—they know common error codes; they don't get freaked out."

Where Maser sees opportunities for open source at Seneca is in the desire for customers to load operating systems based on Linux or Red Hat Inc.. "What we're starting to see customers coming to us to provide the installation we provide on the Microsoft side on the Linux side," he said. "Several customers are coming to us looking for the latest and greatest version of Red Hat, because they want the support—typically the issue with open source is not the writing and building out of code; a lot of it is about support."

When dealing with open source products that Maser says might not yet run on bleeding-edge hardware, custom builders need to be ready for any interoperability or performance problems open source software might create. "Trying to accommodate everyone's requests is very difficult to do," he said. "There is a lot of compatibility issues, so you need to do your homework up front."

For Jim Zemlin, executive director of the Linux Foundation, a nonprofit consortium dedicated to fostering the growth of Linux and the open source community, the benefits open source provides custom system builders are clear. "The economics of using open source technology to build a custom solution is totally obvious, right? It's free," he said. "That really translates into more profit for the VAR because they can sell the product and service at a lower cost because their cost without high license fees are lower."

He said any concern about Linux or other open source software being perceived as "unstable" or lacking confidence from the enterprise industry has largely dissipated. "Do many of the people buying boxes even know or care if it's proprietary?" he asked. "They just want a solution that works." Zemlin said it's hard to overstate how pervasive open source products are in the technology market, even if many aren't even aware of the trend. "Cisco's entire Linksys product line is built on Linux," he points out. "You just don't see it marketed necessarily as Linux."

Todd Swank, director of marketing at Burnsville, Minn.-based custom builder Nor-Tech said he believes opportunities for custom system builders exist within the high-performance computing (HPC) space. "The primary opportunity we've seen is in HPC clusters, where that segment is dominated by open source," he said. "They tend to prefer clean code, a very light code [that] won't get in the way of the calculations they want to perform."

Those clients exist mostly at the enterprise level and consist of customers with their own IT staff and their own Linux programmers on staff, Swank said. "You always think, 'Oh, people with no money want open source,'" he said. "But if you're a business looking for a real application, you need to have somebody who can make that work, so you're going to go with Microsoft or hire someone [who knows] how to support that open source format for you."

Swank said Microsoft has the kind of resources available that allow Nor-Tech to build their custom systems business, he said. The training, advertising support and technical support they can provide allows Nor-Tech to spend time focusing on the solution and not worry about the interoperability and stability issues often associated with open source-based custom systems. "For small companies like us, it's very beneficial," he said. "In the open source community, you're kind of on your own."

Like Maser, for Swank and his customers it comes down to a reliability and trust issue. "Open source works in certain aspects but a business doesn't want to spend all day long figuring out how to get their applications to talk to each other. They want it to work," he said. "Just because the code is free doesn't mean the people who know how to support it work for free, or even cheaply. In effect, you may be paying more than people skilled on the Microsoft programs."

Next: Great Future For Open Source Applications

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Given time, however, Dominick Sartorio, president of the Open Solutions Alliance (OSA) and senior director of open source solution provider SpikeSource, sees a great future for open source applications in the custom systems space. He bases his faith not only on the illustrious history of custom systems (Sartorio points out the computers responsible for the lunar landings were custom systems), but on the inherent adaptability and customization open source provides.

"The very first computer systems were, by definition, custom," he said. "You always ran into unique requirements where performance or reliability were such that you couldn't just take it off the shelf, you had to tweak it in some way. Obviously open source makes that really easy."

Sartorio points to the 1990s, when the National Security Agency (NSA) turned to open source to provide a custom system solution. "The NSA had unique requirements regarding security and performance, and no existing operating system met them, out-of-the-box," he said. "But Linux was open source, so they could make their own changes to meet their requirements." When the NSA's changes were contributed back to the community, Red Hat picked them up, and Red Hat Enterprise Linux was the eventual result.

"The main point is that there are diverse requirements out there, and packaged operating systems can't meet all of them," Sartorio said. "But open source allows customers and integrators to make changes themselves, without onerous licensing requirements. Consequently, open source provides system builders with a unique opportunity to deliver custom systems at low cost."

The NSA story, he said, is just one example of this. "The general message is open source makes it really easy to build custom systems, especially down at the operating system or driver level," he said. "A Microsoft cannot think of all the differences someone might need, that level of customization."

Along with the right certifications, Sartorio agreed with Maser that support for open source custom systems is key. "The biggest challenge I've seen is, if I make a change, how do I get it supported on an ongoing basis," he said. "The higher up you go in the stack, the more likely you'll need to make code changes in the average engagement."

Often, solution providers want to do a project for a customer and then move on to the next one, he said. Support issues, which can require considerable additional time and effort, present a challenge. "This is sort of an ongoing pain point for solution providers: The more arcane your requirements, the harder it is to find someone to step up to support," he said. "If the system could go down and it's a mission-critical thing, you may be spending an inordinate amount of time dealing with it."

That's the double-edged sword of open source solutions, he said, but a smart system builder can use the advantages of open source products to the company's advantage. "The strength of open source is it's easier for downstream custom systems builders to make changes, but it's more important for the owners of those projects to make them easily extensible and highly modular," he said. "If it isn't, you're going to lose out to products that make it easier to interoperate and maintain."

Although Sartorio noted it's usually in the enterprise space where custom system builders can take advantage of a company's unique requirements, highly specialized SMBs provide opportunities as well. "The average SMB will have pretty standard requirements for setting up a CRM or something like that," he said. "That's not always true, though—you will find some opportunities at the low end, like when they're required to or they don't have a lot of budget, but the open source option allows more wallet space to make a custom solution."

Swank pointed out as more success stories around open source systems emerge from the enterprise, open source solutions may gain additional prominence, but demand for technicians who can navigate the intricacies of open source operability will also rise. At the same time, he recognizes a push for greater compatibility and interoperability. "It's not an easy skill—you don't just read a book and become a Linux programmer," he said. "You better know what you're doing, but if you have those skills already, the sky is the limit."

Linspire Inc. president and CEO Larry Kettler agreed that open source implementation can be a double-edged sword. As head of the San Diego-based Linux-based OS developer, he said lower cost and stable performance combat the inherent comfort with Microsoft. Penetration into vertical markets remains a challenge. "Where's the verticals?" he asks. "That's the question everyone wants to know the answer to—and that's the problem. It's not defined."

Viral growth is occurring across all markets where people are trying an alternative operating system, Kettler said, but no one is demanding one specific brand of Linux, which results in a "quiet seeding" out to the customer base. "As system builders put together customs solutions they just market to their customers, some of them are meeting a certain profile and are interested in trying [open source software] because it's a new, viable option," he said.

Kettler also brought up the added cost that quality support can bring. "Custom system builders are making sure they select the best Linux OS when they go to market because you want a strong community supporting those new users," he said. "They're making razor-thin margins with their hardware, and multiple support calls just erode those margins. You've got to have a strong, well-known brand and a community behind the brand."

In late January of this year, Linspire announced a Linux OS Build Service designed to help partners shorten time to market and mitigate the expense of building a desktop Linux operating system. Patience is always a necessary quality for a custom builder providing open source solutions. "What they're doing is entering a Microsoft world with a hardware and certification process alone that can be very daunting," Kettler said. "Know your market and set your expectations accordingly. You want to sell it as a solution."

Kettler said system builders need to be able to explain the value of their approach and emphasize the inherent modularization of open source products. "It's partners asking for custom software stacks, specialized applications, the ability to alter the look and feel of the OS," he said. "As the market continues to grow, and as Linux is inherently customizable, why not provide that service to those clients who are looking to create customized solutions for their customers?" he asked.

The infusion of open source products into the custom systems niche will take time, Kettler predicted, and for those companies branching out into Linux or its variants, setting reasonable expectations is critical. "Learn from everything you do, market the products to your customer base, and if you stay consistent, you'll start to carve out a Linux space in your market, and they'll start asking you for more solutions," he said. "The whole idea behind Linux is collaboration—they'll want to hear from you as much as you want to hear from them."

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