Like most people in business, whitebox manufacturers and resellers are risk averse – especially when it comes to switching end-user software. While open source options have been available for well over a decade, locally produced systems with pre-loaded open source software are virtually unknown and most of the growth in the open source market is attributed to the major vendors.
However, there are some potentially lucrative business opportunities for open source-based whitebox systems.
According to the vice-president for Linux distributor Red Hat in the South Asia-Pacific region, Gus Robertson, the Australian market is ripe to repeat the company’s successes in countries like the US and India.
“We have had a lot of success working with whitebox manufacturers in other countries, either on pre-loaded products, or pre-tested systems,” Robertson said. “Red Hat experienced 100 per cent year-on-year growth over the past 12 months, and we are looking for the same growth over the next year. At the same time we have appointed Ingram Micro as a distributor, and are shifting from a direct to a channel model so there are great opportunities for the reseller community.”
Managing director of PC manufacturer, Optima, Cornel Ung, said his company is often approached with requests for back office systems, mail or proxy servers and portal servers based on open source software. However, the company has yet to make the jump to shipping pre-loaded open source systems.
“We often ship products which are fully tested for a Linux environment, and let the end users download the software they want to go with,” he explained. “We’ll be shipping boxes with Red Hat Linux licenses in the future, but at this stage it is really just for the backend, not for the desktop.”
According to Ung, before whitebox manufacturers and systems integrators can bring Linux out of the backroom and onto the desktop they need to overcome a mighty hurdle: the cost of training and support.
Conversely, some in the channel are discovering that the training and support requirements associated with open source solutions on the desktop provide a welcome boost to their business.
Rather than further reducing their margins in order to expand their market base resellers exploring open source/whitebox options are gaining a profitable inlet into the market for low-cost computing, and have an increased opportunity to gain ongoing income streams from support and training.
After five years in the systems integration game, Astute Systems has also found itself focusing almost entirely on open source solutions over the past eight months. Astute solutions manager, Paul Moore, said the combination of high-profile Linux rollouts, and the right internal skill set has lead to a dramatic increase in the company's open source business.
“There can be no doubt that greater customer awareness has been driven by some of the large corporations such as Reuters and Amazon adopting Linux,” Moore said.
He claimed this increased awareness is driving more people through his door. However, once they are there his ‘sell’ is focused on the improvements in hardware efficiency with the system and the unrestricted growth open source’s ‘free’ status allows small businesses.
And while he estimates it would be sometime before Linux finds its way onto your average home PC, he said it will not be long before corporate rollouts on the desktop become commonplace, especially as the platform for industry-specific applications.
Managing director of Linux-focused reseller and integrator, Cybersite Consulting, Jonathan Coombes, said the affordability of open source systems has led to an increased interest from mid-sized companies, local government, non-profit or charitable organisations as well as other technology-based businesses.
“Interest in Linux has been reinvigorated in the last 12 months, we’re seeing more people interested in combined solutions, where they run open office on Windows, or Microsoft Office on Linux,” Coombes said. “For the end users the cost of training is immediately recouped by the savings the company makes on the software.”
So the end-user saves money, and the channel gets a greater cut of the overall cost of the solution. Rather than fearing the training and support boogieman of open source, resellers should perhaps be looking at ways to integrate it into their business model. And given companies like Astute and Cybersite Consulting are reporting healthy growth rates, not to mention Red Hat’s plans to double its sales in the next 12 months, the open-source/whitebox combination might provide a welcome extra boost to business.