Lindows.com, the Pitch.

On Febrary 6th 2002 I saw Michael Robertson, CEO of Lindows.com, speak at the local San Diego Linux Users Group. Mr. Robertson, founder and former CEO of mp3.com, is a charismatic and compelling speaker. He makes his audacious schemes seem logical, even self-evident!. When I saw Mr. Robertson speak at San Diego's "new economy" event iLounge in 1999, he was in the midst of the controversies about syndicating hundreds of songs via the My.mp3.com service. This is the incident that ended up in settlements with multiple music companies totaling million of dollars with the music industry. Robertson got the last laugh, as mp3.com was sold for $372 million to Vivendi, and continues to be a force in the online music space. In 2001 he founded Lindows.com here in San Diego, California, USA. In so doing, he has attracted fire from the largest Software company in the world, Seattle's Microsoft. He spoke about Lindows, Operating Systems, Microsoft, and the changing role of the OS in the mix of computing.

The Setting

The meeting was held in an office adjacent to the offices of Delphi Research at an office park along the 15 Freeway. It was standing room only, and there were over 100 people there.

The Pitch

He started with a very lite tone. He referred to a discussion he had with one of his people -- positing this truism: Cells divide. They do not merge. He mentioned that in, say, kitchen appliances, we see more and more specialization. All-In-One devices are not the norm. Rather, what we see is more and more specific devices. The microwave, toaster, and the coffee maker are all examples of that specialization. He was noticing that PDA and his cellphone would never mix, because this would violate the principle that: Cells divide. This principle of differentiation echoed throughout his talk.

His second talking point was this: Competition spurs innovation. He mentioned US automaker Ford, who famously noted that Ford autos could be "any color, so long as it's black." If one looks around now, there is an incredible array of vehicles for sale. There are hundreds of makes and models and colors and options of all kinds in the automotive space. The auto space has morphed. But why has the OS not morphed? The answer for Robertson is that because there is no competition in the OS space. This "is great for Microsoft. It is not great for users." This lack of competition harms consumers. This, he described as what has compelled him to put his entrepreneurial energy into Lindows.com.

Lindows v. Lindows.com

He also repeatedly referred to his young company as "Lindows.com" -- speaking it out as "Lindows dot com." He not once referred to it as "Lindows." I speculate that part of this is habit, his previous company was "MP3.com" after all. But also to differentiate his company from mere "Lindows," which is closer in name to "Windows," and so less apt to cause confusion in the marketplace. Emphasizing the "dot com" may not be as sexy as it was in 1999, but it's a nice way to deflect Windows trademark disputes.

Where Is The Specialization in Operating Systems?

Building on his point about differentiation, Robertson noted that we have not yet seen real differentiation in the scale of desktop operating systems, or in the price of operating systems. We have also not seen a decrease in the price of office/productivity suites. Boiled down: the price of the OS has not gone down. He also noted that the top 10 technology companies' profits do not add up to the profits of Microsoft. This seemed to be pushing us to conclude that MS profits are evidence that MS is not doing what it could to differentiate based on price.

Strategy: Differentiation

Robertson was saying that we should see the same differentiation in operating systems that we see in other industries. Lindows.com is pursuing just this strategy. He admitted that if his nascent operating system went up against Windows " head-to-head, feature-for-feature -- we'll lose." Again, his strategy is to provide a different product, a slimmer product, a unique product. He mentioned that his company has 30 employees. All this seemed to be a point about being small, scrappy, and having a vision for alternative operating systems. This was an easy sell for the Linux crowd, obviously.

Aggregating Open Source Software: Just Like Aggregating Amateur Artists

He mentioned mp3.com several times during his talk. One of the more apt comparisons he made was that Lindows.com would do for (Linux-based) open source software what mp3.com did for amateur music artists -- provide a venue for the masses of open source content. Freshmeat.net was mentioned as a source for new software, and Robertson remarked that you couldn't tell your mother the name of that website. This argument is about providing a "Don't Scare Off Consumers" method of installing software into their operating system.

Transitioning from MS Hegemony

Critical in being "consumer oriented" was to have a smooth transition to Linux. He compared it to making a transition from English to Esperanto -- most people can't commit the time to suddenly be thrown into an entirely new idiom. This is what he was talking about when he mentioned that the LindowsOS "speaks Windows." Essentially, if you've used MS Windows, you'll understand LindowsOS.

My (Lindows) Computer

Data migration was an important area. He mentioned that the goal for their installer was that it must be able to install over the top of Windows, and leave the "My Folders" alone. The way he spoke, a major point for his company is that the new OS should be quite similar in feel to the original OS.

Applications Too!

He spoke of how when one installs LindowsOS, your previously installed Windows apps will migrate with you. He admitted that not everything will run well or at all, but they will nonetheless be migrated in to the LindowsOS "Start Menu." One audience member noted that not even Windows XP will run every windows software out there.

Their focus is on a core set of applications. A "Top 10" of Windows programs. The list he ticked off included: Word, Excel, Powerpoint, Internet Explorer, Outlook/Outlook Express, America Online, Quicken, Lotus Notes. He seemed to be saying that they are making real progress in doing this, whether by emulation inside WINE, or as the open source equivalents. KMail was mentioned as the default mail program for LindowsOS.

He also noted that there is more software migrating to the web. The LindowsOS argument is about getting people to consider a non-MS OS, and then providing them with a migration strategy.

Dedicated Machines

Part of Robertson's argument is that not everyone needs a general purpose operating system. He touted the fact that LindowsOS installer will have options to have a simple installer. If the target machine will be used by, say, a secretary/receptionist, perhaps all that's needed will be a browser, a word processor, and an email client. The installer will have the capability to do just that. He mentioned the concept of a "Chat computer" -- perhaps your teen son wants a machine to be able to chat and do email -- wouldn't it be marvelous to have a machine which does simply that? Why do you need $100 worth of operating system for just that? The economics of MS operating systems in this model break down.

I like the concept of specialized, slimmer computers. I have several family members who don't need anything more than AOL, Word, custom card software and Solitaire -- being able to sell a machine with a low price point (because of the lack of a full MS operating system) is one of the smarter rationales for Lindows.com I can see.

Lindows.com has not I think, figured out how their pricing model will work as of the moment. The issue of bulk pricing for OEMs was not specified. Presumably the talk of avoiding the MS tax would make us think that an analogous "Lindows tax" would be much less than the current $80 MS tax. My friend and colleague Matthew Lee, who also attended, comments: "This wasn't specified because there is no chance for any OS other than Windows to get on the OEM desktop. All the major vendors have long-ago signed exclusive agreements with Microsoft to ship only MS OS'. Robertson actually mentioned this specifically." How the MS Settlement affects this I don't know.

The Terrible Consumer Experience

Robertson then mentioned the current consumer experience of Windows. He mentioned the XP "Activation Code" as an example of how the consumer experience of Windows is getting worse with XP rather than better. His point on this is solid. Installing any operating system is bound to be painful -- it's a major operation. But XP is actually making the process "more intrusive."

He described the goal for his company to make the license for LindowsOS be a "per person license" rather than a per machine or per processor model. He emphasized that the raison detre for the company was to make OS licensing behave according to a "fair model."

My.Lindows.com

One of the features mentioned by Robertson that is unique is something he referred to as "my.lindows.com" -- which will be a mechanism to "zap software to a home computer" -- as a mechanism to allow machines to remotely update themselves.

Two-Track Install

LindowsOS will have two kinds of installs, a "friendly install" and a "take over hard disk" install. Both can occur over the top of an existing Windows installation. The friendly install he said, will have a capability "to be undone." The idea again is to make migration easy. He talked about the fact that on an existing machine, Outlook Express mail would be converted and imported to the mailer for Lindows, which would be KMmail. And that existing favorites, would be brought over to "our browser." Also, all your Windows applications will come over as well. He stressed that not all of them will work, but they will all come over.

Half A Billion Computers in the World

Here's the "it's so crazy, it just might work" part of the argument Robertson laid out. If I understand him correctly, the bulk of his target market is not so much consumer, as corporate. I have no idea if his numbers are right, but here's what he was saying. There are half a billion computers in the world. Most of them have plenty of life in them. Unless you're gaming, the speed of the bulk of the computers out there is fine to do the most common computing tasks. Half (250 million?) of these are running something like Windows 98. This is a market ripe for an upgrade. In the Windows world, there are ME and 98, and these are "garbage." Then there are machines running 2000, NT, and XP, which are "okay."

He then addressed one of the questions in the minds of many -- what about BeOS, and OS/2, and Eazel, all of which failed to replace Windows and suffered ignominious ends.

His argument is that Linux, which has been roiling and boiling for a long time, has, with things like KDE, begun to be on a par with user expectations. All the computers stuck with older operating systems are ripe to be upgraded.

Broadband is Key to the Lindows.com Strategy

As in his mp3.com, Robertson indicated that digital distribution, particularly the availability of broadband / DSL / cable modems, is crucial to success for his new OS. He described that in retail stores, and with OEMs, Microsoft can block competitors. But Microsoft cannot prevent people from typing "LINDOWS DOT COM RETURN" into a browser's URL bar. One fellow in the audience noted that "They could in IE" -- which got a big laugh out of the audience.

Microsoft Behavior

Also of note is that he said "Microsoft's bullying plays into their [Lindows.com's] strategy." The harsh behavior and terms they impose work against the long-term interests of MS -- they engender resentment and a desire in people to look for alternatives. Speaking of alternatives, I believe he did not mention the Macintosh at all during his presentation. I'm not sure what that means. Perhaps the current Mac popularity and quality undermines the notions of MS monopoly. That monopoly has been proved in court.

On the issue of Macintosh, and for an alternative take on the Lindows pitch from someone who attended the same meeting I did here are comments from Matthew Lee:

Again, some opinion here, but alas, Apple has fallen so far from the radar of business computing it is no longer considered relevant. No doubt Apple was muscled out, along with OS/2 , Be, etc. While Apple's recent resurgence has been due to some savvy marketing on the consumer level, the realm of the corporate desktop is owned by Microsoft. Remember, Windows is still a relatively cheap OS/hardware purchase when considering a huge number of licenses. Windows upgrade costs are on par with Lindows retail costs, and typical corporate Windows purchases will include Office suites and other productivity software. Lindows' real advantage over the Mac is it's price, ability to run on Intel, and it's ability to run the same $350 Office suite you bought for Windows.

After revisitng the meeting with this article, and reading Robertson's article in the New York Times, I've pretty much decided that Lindows is a non-issue. Corporate computing does not respond well to change. Asking 1000 or a 100,000 users to suddenly change their entire computing paradigm requires a lot more than an alternative OS. It requires bona fide support technicians, training, and expertise. The expense in man-hours dealing with this kind of change has been enough to keep corporate IT buyers on Windows for the past ten years.

In my opinion, it's not quite so cut and dried. It seems to me that more of this kind of aggressive competitive pressure on MS is only good for computing. If anything, some of the gains LindowsOS makes may trickle into Linux distributions.

Hardware Prices

Hardware prices are all down. $500 is a very common price for new computers. When new machines were $2500, an $80 operating system is not such a crazy addition. When hardware is $500, $80 starts looking like a substantial part of the price. Hardware prices only continue to shrink -- eventually the price of the OS will overbalance the price of the hardware itself, and at that point Lindows' argument will be proved.

Perfect Storm

With hardware prices, MS behavior, lots of machines waiting for an upgrade, and broadband in the mix, he described the current marketplace as a "perfect storm of market conditions" for a new entry into the operating system market.

That Ole Time OSS Religion

Robertson talked about mp3.com and his relationship with open source software. Mp3.com was built on MySQL/Apache/Linux, and he's always been a fan of OSS. He sees Lindows, at least in part, as a means to give back to the community. Linux lacks great marketing, and great education. The implication was that Lindows would be standard bearing for the Linux/OSS community.

Digression: DOJ Case

One of the things he mentioned was being consulted by those working on the monopoly case against MS. He said it was very illuminating to talk with those folks. They spoke about APIs and File Formats. He mentioned that they (Linux users) are faced with a world that thinks Microsoft is a great innovator. He was also wary that they (MS) "control the press in a lot of ways."

Stray Stuff, Final Points

Robertson finished up by showing the friendly installation process of Lindows. He opened an Excel file. He noted that Excel, Powerpoint, and Word Files make the LindowsOS transition "really well." He also noted that the OS is heavily KDE based -- Konqueror and Kmail are mainstays. He noted that updates to the OS will be being pushed out using a Debian engine under the hood. The goal for the OS is to be "seamless." The OS can only be installed on FAT/VFAT, it can't be installed onto NTFS. The installer for the OS they have can be installed with an installer downloaded from the internet onto an existing Windows 98 machine. If a user has Windows 2000 or Windows ME, a CD of the Lindows installer is required. LindowsOS can't be installed onto a WinXP machine. The rationale here is that if you have XP you don't need a new OS. The emphasis, again, is older machines as the target market. He mentioned that Version 1.0 should be in Q1/Q2 2002. He stated that the retail price would be something around "99 bucks." He mentioned again the importance of WINE to this endeavor, and utilizing an API translator to make Windows applications work from inside Linux. He also mentioned excitement at participating in the WINE community and also mentioned a WINE Conference upcoming.

Judo Marketing

When asked about the madness of directly challenging MS, the most powerful software company on the planet, he mentioned "Judo Marketing" -- and that any business with any potential for success also comes with the potential for failure. He said Judo Marketing is also the title of a book, though I could not find it on Amazon. ( Correction: The book is available on Amazon, and it's called Judo Strategy, thanks to a fellow named Donald sending me feedback. )

A Final Comment

It seems to me that the goal of desktop Linux, merged with transitioning people slowly away from Windows is a pretty solid one. Whether Lindows.com will be able to overcome the significant technical challenges remains to be seen. In the end I think LindowsOS will be one of the more interesting Linux distributions, and will have an impact on the open source movement in a big way, or die trying.