jeudi 27 novembre 2008

Apple: PowerPoint presentation

Distribution Policy Apple
View SlideShare presentation or Upload your own. (tags: apple mac)

Apple: Bibliography

Start by the first article: http://moteurs-de-recherches-alternatifs.blogspot.com/2008/11/apple-distribution-policies-at-apple.html

7 Bibliography

http://ejschmidt.com/blog/
http://www.nytimes.com/
http://www.ifoapplestore.com/index.php
http://www.businessweek.com
http://www.economist.com/
Apple, Inc., Annual Report, 2007
Yoffie, D., Sind, M. « Apple Inc., 2008 » Harvard Business Review, 2008
Chernev, A. « Apple Retail Stores » Kellogg School of Business Review, 2002
Apple Retail Manifesto, Apple 2001

Apple: Conclusions and recommendations

6 Conclusions and recommendations

What advice can be given to a company that multiplied by 3 its revenues in just 3
years (not being a start-up, but an $8 billion multinational) and that from an
“ancillary” activity, like retail, is able to squeeze $5 billion and half a billion of
profit? In order to give an answer I think that we should step back for a moment.
Apple today earns money through electronic devices, but competition in this field is
increasing and hardly they’ll be able to maintain high margins. Apple has already
stepped in the service market: the iTunes, although barely profitable, is a leader and
the App Store (a store for software for handheld devices) is growing quickly. The
development of mobile telecommunications should enable in the near future cheap
mobile data tariffs. Leveraging its devices Apple could evolve in a Content Service
Provider. Already today, through the App Store they can sell music, movies, TV
shows and software to iPod Touch and iPhone users. The war for future distribution
standards is just at the beginning. Apple should be very careful in adopting closed
proprietary standards, because even the most wonderful device, if doesn’t have enough
developers creating innovative applications for it, won’t gain the benefits of network effect
and thus could be relegated as niche product.

Developing a wide network for content distribution could provide a source of profit for an
undetermined time. It is also possible to envision a future where Apple sells its devices at an
highly discounted price, in order to enlarge the user base and make money through the
services sold over its digital content delivery channel, a strategy already successfully adopted
by video game console producers, most notably Sony, with it PlayStation console.

My personal opinion is that Apple should use wisely the market share it’s gaining. The
hardware is not a sustainable business in the long term, and a transition towards services will
be inevitable. The “digital hub” should be the Trojan Horse for new, innovative formats of
content distribution. Apple already lost the desktop war, I hope they learned from their
mistakes.

Apple: Some strategic considerations

5.1 Some strategic considerations

The erosion of its market share from competitors (especially in the key educational
channel) and the fact they’re niche products required a strong respons. Is the retail
the good one? With its top-notch brand and world renowned marketing abilities,
Apple should have good chances of improving on the terrible experience of Gateway
Country Store model. If they succeed they’ll gain fresh outlets to sell its own
products and would also likely to gain additional revenues as a reseller of other
electronic goodies and have more control over marketing and servicing of its
products. Moreover, Apple could boost margins by cutting out middlemen and
convince buyers to choose higher-priced models pushing on the “emotional
shopping” stimulated by these types of stores.

However this is a dangerous field. To have shops in high traffic locations means
huge fixed expenditures for rents and it is hard to say if Apple will be able to keep
alive the big hype they’ve created. Moreover other retailer were not happy with this
decision (some also sued the company, but the court ruled in favor of Apple).

There’s no way to know if the costs deriving from a more bitter relationship with
resellers will be enough to set off the additional expenses. Any increase in sales
could be due to cannibalization, which is probably the biggest threat.

Apple claim that their stores are less than 3% than the total number of resellers in the
USA, thus not constituting a credible competitor in terms of volumes. They thought
that if they’d be able to double their market share to 10% thanks to the store, the
resellers would be the ones to enjoy the biggest share of the additional sales.
5-1 SWOT analysis

Apple thought that since it had a huge brand equity, an excellent supply chain
management and already billion in annual sales (plus $4 billion in cash to invest) to
jump in retail would have been a bet worth to be taken. If we look at the financial
results we can see that were proved right.
The retail activities were profitable in just 3 years. Since the lunch they experienced
a steady growth in turnover close to 50%. Profitability is a record level: with a net
margin well above 10% the Apple Stores are among the most profitable retail
activities in the US. It is interesting to note that the margin of the retail division,
which should be a low margin activity, is not very far from the margin from
computer and devices, which are high margin operations. This means that there a
great level of service embedded in their operations.

Apple: c)Establish gold standard for Apple buying experience

c)Establish gold standard for Apple buying experience

Jobs synthesized “We want to set an example for all our resellers. Maybe they’ll
have better ideas, but if they don’t we want them to take our ideas and adopt them as
their own”. Apple Stores are designed for delivering an high quality buying
experience. Personnel is highly trained and motivated and there’s in every store an
Hot Line with technicians at the headquarters in Cupertino for difficult situations.
Along with the company’s products there’s a wide offer of third-party accessories
and about 300 software packages. It is possible to buy everything is exposed because
the stores have an inventory of about 300 SKU for every item. The stores collaborate
with the resellers for raising the experience levels, and provides data,
recommendations and consults to other dealers.

Apple: Convey the value

b)Convey the value

In the shops every product is exposed and fully operational and often the same
product is shown operating in different situations (for example imaging, music, etc.).
People walk in and browse through the store, trying the products and experience a
warm environment. The stores match very well with the “hit product” strategy
because they drive a lot of traffic. After Apple has presented in a spectacular show
some new trendy product people want to see it, feel it, and touch it. The stores helps
to convey the value. This has had also a positive impact on the brand because gave
an appropriate frame for the purchasing process of their devices.

Apple: Growth

a)Growth

At the time Apple’s market share was just about 5% and this meant that there was
another 95% that could be converted. This means that there’s room for growth. The
stores were designed specifically to drew in people who normally don’t buy Apple
products. The shop locations were choose according to demographic researches and
placed where there was an high density of Mac user but also many Windows users,
with a profile quite close to these of usual Apple customer. The shop were located in
places with an high level of traffic, where people go for shopping and being
entertained and design for catching attention immediately; with this strategy a causal
Windows customer had the occasion of going in a shop while having a walk and see
by himself what does Apple offer. If only 5 out 100 of those who don’t even
considered buying a Mac could be converted, the company’s market share would
nearly double. The “destination-location” option was dropped because a potential
computer buyer who don’t even consider buying a Mac is unlikely to drive 20
minutes just for visiting an Apple Store.

Apple: The Apple retail strategy

5 The Apple retail strategy

In 2001 Steve Jobs announced that were going to open the first store directly owned
and operated by Apple and dedicated exclusively to Mac computer and related
product. This decision raised many perplexities, because at the time most
manufacturer were shutting down their retail operations and focusing on products
(especially Gateway had a very bad and expensive experience in the retail sector).
Apple thought it was the right thing to do essentially for 3 reasons:

a)Growth;
b)Convey the value;
c)Establish gold standard for Apple buying experience;

Apple: Some considerations about the distribution policies

4 Some considerations about the distribution policies

Apple adopted a multi-channel distribution approach for mainly three reasons:
1. Reduce pressure from buyers that could negatively affect margin.
2. Have more control in order to ensure a buying experience in line with
products standards of quality.
3. Reach high visibility.

4-1 Competitive pressure.

As many computer and consumer electronics manufacture Apple is exposed to heavy
pressure from large retailers and wholesalers. Although the company has a very
strong brand and well differentiated products the retailer has still a lot of power on
exposition, promotion customer service. A selective and differentiated distribution
helps to reduce the bargaining power of buyers.

The On-line shops are useful as a showcase for the company’s product, but it is
mainly used by people who already owns a Mac and that do not need to try the
computer because they already know how it works. They are more attracted by the
possible customization and by the wide selection of peripherals and accessories that
the website offers. For example it is possible to choose some components of a PC
and have a personalized write engraved on the back of an iPod and ask for a gift box;
moreover only through the On-line store it is possible to redeem gift voucher. At
their heart, the On-line shops are more a service to its customer, than a competitor to
large e-commerce website, like Amazon and eBay, which have a pricing strategy far
more aggressive.

Although having being pretty selective in the past, today Apple is far more open to
large mass retailer than it was in the ‘80s, when only authorized dealers were allowed
to sell their product. It was decided to jump in for taking advantage of the large
amount of traffic generated by large retailers. Since 95% of those who are going to
buy a computer didn’t even consider a Mac a presence in the place where most
people buy electronic was essential. However this strategy presented more than a
challenge.

Big retailers are used to deal with big OEMs don’t have the will and the capacity of
providing a comfortable buying environment. Mac were stored on the shelves with
other computers and the small range of products (3 desktops and 2 notebooks) almost
disappeared within the vast assortment of big shops. They were not getting the
exposure they needed and the low knowledge level was a barrier for those curious
the try the machines. In 2000 Apple realized that retailers were damaging the
relationship with its customers, at a time when the company was being heavily
pressured by Dell’s direct distribution model. Not only: this dramatically reduced the
possibilities for a significant user base expansion, since it was not possible to explain
the possibilities of a Mac to customers used to see Apple as a something exotic,
aimed mostly for computer geeks. Dell had a much better control of its relationship
with customers and Apple had to take countermeasures.

Apple: An overview on the company’s distribution strategies

3 An overview on the company’s distribution strategies

Apple sells its products worldwide through its on-line stores, its retail stores, its
direct sales force and third-party wholesalers, and value added resellers. Historically
the company was used to rely on a network of authorized dealers that served both
consumer and business customers and that provided customer care as well. They
tried to make sure that resellers were highly committed, well trained and focused on
sale. They wanted to provide an high quality service and were always very selective
and avoided mass market retailer, like Wal-Mart and Target.

During the ‘90s Apple begun to sell also through large retail chains and reached
agreements with Sears and CompUSA, two large outlet chains. There was the need to
get an higher visibility and the success of products like iPod, suggested a more mass
oriented approach. However the exposure they got was low and the service level
terrible. Moreover, staff in the outlet had an incentive to steer customers towards
Toshiba and HP products because these companies adopted a very aggressive
incentive strategy and paid a large bonus for every PC sold.

Apple decided to try with store-within-store concept. They built dedicated stands
within shops, with large posters, marketing materials and displayed computers that
were served by retailer’s staff. It didn’t work. Once again the salesmen were not
trained, nor motivated and Apple’s small product range didn’t received enough
exposure. When the company decided to use its own staff things improved
dramatically.
3-1 Distribution strategy

In 1997 Apple ventured in a completely new field: on-line sales. It was the first time
Apple sold directly to its customers. The On-line store offered the full product range,
with a vast choice of third party accessories and built-to-order capabilities, following
the path first pioneered by Dell. The good implementation and customization
capabilities determined its success.

The great response from well tailored sale services pushed Apple to take one the
biggest bet of its history: the decision to enter the retail business.
In 2000 were unveiled plans to build a chain of Directly Operated Stores, under the
supervision of Ron Johnson, a former vice-president of retail at Target and a veteran
in the retail industry. The first shop was opened May 19, 2001 in Virginia and
nowadays 230 shops are operative and in 2007 about 20% of global sales were
generated through DOSs.

In 2004 the whole distribution was restructured: the authorized dealers, known as
Apple Center or Apple Dealer become Apple Premium Reseller, a customized shop
highly committed to sell Apple products owned and operated under license by third
party operators; sales agreement with CompUSA were scrapped and a new
agreement with Best Buy was done that will lead to the creation of dedicated spaces
with 200 shops; agreements with Sears were renegotiated and Mac sales were
allowed only in selected spaces in shop with high affluence volume. At the same
time iPods, peripherals and accessories were distributed to wide variety of shops,
from small corner store, to music shops, to big brick-and-mortar supermarkets. For
the latest product entered in the catalogue, the iPhone, Apple signed exclusive
agreements with leading carriers in every country served and the device is sold
exclusively through the retail network of the phone operator.

Points of sale not directly operated by Apple are sourced through third party
wholesalers but it is possible, for any computer dealer who buys more than $2
million worth of Apple product a year, to buy equipment directly from Apple, rather
than through a distributor. This strategy was devised in order to reduce the markup
added by distributors: Apple applies a 3% discount for dealers who choose to buy
products directly from the manufacturer.

Apple: Company strategy

2 Company strategy

Apple relies on the unique integration of hardware and software, both developed inhouse,
to deliver the best possible consumer experience. Their devices sports a
unique design and some of them are recognized as icons of contemporary industrial
design. The target is extremely broad and the company has reputation of delivering
exactly what they promised, without fuss.
The product range is narrow and typically Apple chose to bet on few,
groundbreaking, hit products rather than on incremental steps. This strategy has the
advantage of creating a strong differentiation among other computer makers and
generates a lot of buzz around the company’s products, that leads to real brand
substance.

The product roll out process has more in common with the fashion industry, than
with other IT company; new products are unveiled two times every year, during
keynotes held in February and September; the keynotes are more similar to a show,
or to a catwalk, rather than a press conference, since they’re hosted by Steve Jobs
himself in a spectacular frame within the San Francisco’s auditorium.
Historically, Apple had little if none interest in market share; they preferred to sell
high quality product with a pretty good margin to a small group of extremely loyal
customers, rather than exploiting the mass-market with compressed margins.
However the scenario is changing. The pressure on prices is growing as competitors
are closing the gap and the computer hardware is increasingly becoming a
commodity, and thus hard to differentiate; moreover the expenditures for developing
new software products increases dramatically as long as programs becomes more
sophisticated. MacOS X has cost about $1 billion do develop in 2001 and Windows
Vista, released in 2007, required almost $3 billion. To amortize these large
investments over a small user base (Apple sold 9,715 millions of Mac computer,
compared with 140 millions of Windows Vista licenses sold by Microsoft) could
require to charge a premium too large even for Apple’s ultra-loyal customer base.
In order to overcome this limit Apple moved in two directions: tried to expand its PC
market share, with products that could appeal to Windows users and entered the
consumer electronic mass market, thus becoming more an horizontal hardware and
software provider. The two strategy are self supporting: while its customers will be
glad to expand the capabilities of their Mac with portable mp3 players or cell phones,
the company will also be able to exploit the “Halo Effect” generate by iPods and
iPhones.

The achievements of this ambitious results, as we’ll see in this paper, relies heavily
on proper distribution management.

Apple: Company background and products

1 Company background and products

Apple Computer, Inc. was founded in 1976 in Cupertino, a small town near San
Francisco, CA by two college students, Steve Jobs and Steven Wozniak. The
company was a pioneer in the computer industry and their Macintosh II computer is
credited as the first modern personal computer. Apple experienced a strong growth
during the ‘80s, however, due to some wrong decisions (mainly a closed architecture
approach to computing) it lost the so-called “War of Desktops”, thus leading to a
long decline that lasted until the late ‘90s, when Jobs stepped back at head of the
company he founded.

During the second Jobs era the company tried to reinvent itself; it renewed
completely its product line and entered new markets following its philosophy of
offering high integration between hardware and software and superior industrial
design.

Nowadays Apple designs and manufactures personal computers, portable digital
music players and mobile communication devices and produces and sells a variety of
related software, services and peripherals. On January 9th, 2007 Steve Jobs
announced during a keynote that Apple would be known from that point on as Apple,
Inc. in order to reflect its commitment to a whole “Digital Lifestyle” range of
products, rather than merely to the PC business.

Apple: Summary

Summary
1 Company background and products
2 Company strategy
3 An overview on the company’s distribution strategies
4 Some considerations about the distribution policies
5 The Apple retail strategy
a)Growth
b)Convey the value
c)Establish gold standard for Apple buying experience
5.1 Some strategic considerations
6 Conclusions and recommendations
7 Bibliography

Apple: Distribution Policies at Apple Inc.


By Alberto ZANCO

Microsoft: Power Point presentation

Salut à tous,

Je viens de passer ma présentation orale sur Microsoft pour mon cours de "distribution policies" à l'université de Kassel en Allemagne.
Je vous poste ici mes slides au cas ou ça servirait à quelqu'un:


Par ailleurs il est vrai que je ne publie plus beaucoup en ce moment la raison est que j'avais pas mal d'examen jusqu'à présent(encore un cet après midi) et que je suis encore tombé malade. La bonne nouvelle c'est que je suis officieusement en vacances dans la soirée et vais être enfin libre pour m'épanouir dans ma thèse. Pour info il faut que j'écrive 80 pages de thèse pour le 28 janvier c'est pour vous dire qu'il va y avoir du contenu sur le site, ne vous inquiétez pas.

A bientôt,

dimanche 23 novembre 2008

OSS for companies: Glossary

Starting the report from the beginning

IV-2 Glossary

Copyleft:It is a legal instrument that requires those who pass on a program to include the rights to use, modify, and redistribute the code; the code and the freedoms become legally inseparable.

Open source: means the source code is available to the users.

Operating system (OS) : is the software that manages the sharing of the resources of a computer and provides programmers with an interface used to access those resources.

Proprietary software: is computer software with restrictions on copying and modifying placed on it by the creator or distributor.

Source code: the intelligible and understandable version by a human being of a computer programme.

Ubuntu/Linux:Ubuntu is in fact a whole operating system Linux for PC. The basic system and all the software which are with it are available freely .A help is available trough the community, or by professional support providers. « Ubuntu » is an old African word which means "humanity by caring about the next generation". Ubuntu also means « I am what I am beacuse of everthing we we are ».

Unix: is a computer operating systyem

OSS for companies: References

IV-ANNEX

IV-1 References:


« Livret du Libre » 2nd edition
« Pouvez-vous faire confiance à votre ordinateur ? » Richard M. Stallman 21th October 2002
« The cathedral and the bazar » Eric Steven Raymond 11/08/1998
"Open Source in the enterprise, new software disrupts the technology stack" Joe McKendrick,Research Analyst,September 2007
"Le Site du zéro" http://www.siteduzero.com/tuto-3-8384-1-mais-c-est-quoi-linux.html#ss_part_1
http://en.wikipedia.org/wiki/Comparison_of_Windows_and_Linux
“Open Source Software: pros and cons” ELAG Workshop #10
http://opensourcecommunity.org

OSS for companies: Conclusion

III-CONCLUSION


As a conclusion we should mention the future of Open Source solutions.

As we saw no one denies it Open Source solutions will grow up in the coming years.

This phenomenon is quite strange because we discovered that Open Source was the beginning of the computer science then come the proprietary software which destroyed everything.

And now we are facing a sluggish reverse effect that we cannot imagine favorable to proprietary software.

However, as I just wrote this wave is sluggish and Open Source is not a revolution.Companies need time...a lot of time. In most cases, fewer than 10 percent of enterprise application portfolios are supported or interact with open-source systems.

It appears that as we could imagine price is the first motivation to acquire Open Source solutions inside a company.

This repoIt shows also that two criticals points are made to Open Source: the security and the support.


On the other hand proprietary software costs in terms of licence,security(viruses) and lock in vendors strategy.


Open Source is not the IT solution for the company this is an alternative which needs to define a specific strategy to integrate it.


OSS for companies: Why people are participating in FOSS communities?

II-6 Why people are participating in FOSS communities?

1st Learn and develop new skills

This is a concept which can be quite strange for someone who has taken the habits of using commercial package.With Open Source solutions you have to understand and try to learn by yourself then if you are really in a mess the community will be here to help you.

A good example of this is when you go on a IT discussion and ask to people to solve your problem directly.Most of the time they don't give you the code or fix your problems they will instead give you some clues to fix it by yourself.

In Open Source there is this philosophy of learning by yourself.The self improvement that we hardly ever find in commercial solution.

2nd Share knowledge and skills

When I began to code in my second year at the university I remember this guy who helps me through the net and explained me how to fix my problem.He corrected all my code.I was in trouble for this code and had to send it in some hours.This guy fixed everything and told me that one day he was in the same situation and someone else did exactly what he was doing now:provide me an emergency solution.

It was great to have this sharing of knowledge with him.

3rd Improve job opportunities

This is a fact which can be proved very easily.The more a technology makes some noise the more you need some people competent in this area.As a matter of facts it creates more and more job opportunities.

4th Derive direct income from this participation


5th Derive indirect income

Such as getting a job unrelated to free software thanks to their previous or current participation in free software developer communities

6th Intellectually stimulating

Computer is a science where it is quite easy to see your progress.When you learn something by yourself and that you can concretly see what you learn this is intellectually stimulating.

I can take for example the case of the French website "Le site du zéro" which give you some material to learn some computer and basic languages such XHTML,PHP,C/C++ and teach you how to use Linux or to set up a website.

When you learn how to make your website step by step it's incredible because you can see your project growing from your first page,first sentence,first picture to how to put your website on Internet.

That kind of experience is intellectually stimulating.

7th Code should be open

This point comes from an ethical point of view which is that: knowledge,culture should have no price.

OSS for companies: Who are the FOSS providers?

II-5 Who are the FOSS providers?

Because a company has to know who provides ICT I choose to develop this point.

FOSS providers can be anyone I mean any business or individual in business.You can find a lot of them through the net.

Because charging you for the software is contrary to the principle of the Open Source they will instead charge you for the support and the maintenance of the system.

OSS for companies: How to migrate to FOSS?

II-4 How to migrate to FOSS?

I found the plan of this part on a PDF file I downloaded on the Internet untitled ELAG Workshop #10“Open Source Software: pros and cons” I modified and far developed it.

Before starting companies should have a clear understanding of the reasons to migrate, and a good knowledge on implementation scenarios;

1st Companies should ensure that there is an active support for the change from IT staff and
users:

Do my IT department is competent for the new tasks I am going to give them?
Do they follow me in my strategy?(this is them before all who are going to install and deal with these new technologies)
Do the users(for example clerks in my company) are ready to get over this step?


2nd Companies should ensure that there is a champion for change - the higher up in the organisation the better it is;

Do I have a manager or a high ranked officer able to change it in the best way?

To sum up these two points: the right question is "Do I have the right guys in my company to do this?"

3rd Build up expertise and relationships with the FOSS movement;

By including FOSS your company will start from scratch in this area and have to integrate some rules such as the community.FOSS is a cultural shock.Your company has to understand how does it works.For example in most of the cases this a relation between a human being to a human being and not a vendor to customer.

To sum up this point: you enter in a new field so be as much inform as you can on it and begin to build your own base of knowledge.

4th Start with non critical systems;

This is what we saw in the first part of the report:43% of large companies run between 1 to 9% of their applications under Open Source solutions.These companies are moving step by step and making their own experience on Open Source.

As a principle of prudence large companies wait to have enough experience with Open Source before to integrate them far deeper.

Small companies have less to risk in this integration this is why 24% of them integrate more than 50% of their open source applications.

5th Ensure that each step in the migration is manageable.

This step is proper to any ICT integration your company has to control all the process of the migration.Managers of ICT have to keep the IT governance and understand what is going on in the migration.

6th Monitor user feedback and fix any problems which arise.

This point is linked to a previous one which is to create your own base of knowledge regarding FOSS.This is usefull when your company needs some support.Support being one of the leakest link of the FOSS.

7th Explain the benefits which your organisation will earn after migration.

This point is linked to the justification of the acquisition of ICT.In the case of FOSS the main benefit that we can see and which is easy to justify is the cost.Now where managers or CEO have to be good at is to prove or acquire the right FOSS solutions which can provide the same or a better quality that the previous solution the company used.

OSS for companies: Pros and cons of adopting Open Sources for your company

II-3 Pros and cons of adopting Open Sources for your company



Pros

Cons

Customization - Ability to rewrite, customize, or adapt code.Fundamental control and flexibility advantages, the users can modify and maintain the software.

Choice of programs – the range of FOSS programs are less developed than commercial ones.Specific necessary software isn't mature.

Security - FOSS products at least provide users with the option of detailed review of the

source code, and to fix problems themselves without waiting for the vendor.

Security - Here is the main reproach done to Open Source solution.Everyone can see how your software has been made.This is the biggest brake among large companies.You expect the code to be trustfull but if it is not?

Localization - FOSS can be trivially localized, a critical advantage where there are languages with a smaller number of speakers.

Localization - Commercial products are developed faster.

Cost – FOSS costs nothing in terms of acquiring the software.It can be obtained through direct downloading on internet.The cost is the main reason of the attractiveness.

Cost – Huge hidden costs in terms of personnel costs for installation,training and maintenance( recruiting appropriate skills)

Support -The FOSS community provides an

extremely efficient learning environment, and a huge source of help information

Support -


-Lack of large companies offering enterprise-level solutions,support and training on FOSS

prevent its adoption by large companies.For example less chance to get a 24x7 support.


-To get support you need to understand the culture of FOSS and the tacit rules of the community.


-Enterprise support not as robust as commercial packages

Freedom from vendor lock in: Imagine that your IT provider goes away.who can support and maintain the software he made for you?...no one because the source code is hidden.

An open source code will solve this lock in situation.With OpenSource solutions you are then independant from your IT provider.

Communication - Commercial vendors are the main supporters of the library meetings, workshops, conferences.


Copy – For example your competitor can make an exact copy of the software or website you developed.Your competitors see the work you make on IT.




OSS for companies: Linux versus Windows

II-2.2.3-Linux versus Windows

"Historically, Windows has tended to dominate in the desktop and personal computer markets (about 90% of the desktop market share), and Linux has achieved between 50─80% market share of the web-server, render farm and supercomputer markets .They differ in philosophy, cost, ease of use, versatility, and stability, with each seeking to improve in their perceived weak areas. " extract from Wikipedia

Here are some areas we should focus our analysis on:

-philosophy
-cost
-ease of use
-stability
-installation
-security.

For this part I could have made a copy of the very detailed analysis provided by Wikipedia on http://en.wikipedia.org/wiki/Comparison_of_Windows_and_Linux but I think everything could be easier if I made a simpliest one:


Windows

Linux

Installation

Within one hour you can install Windows XP on your PC

After two days of trying I am still fighting for the installation of Ubuntu/Linux which has the reputation to be the easiest version to install.I am scared to death that I will have to throw away my PC in case of a bad installation.

Philosophy

Proprietary software.This software belongs to you and only you.You have the right to expect from this software the best it should provide you.

It is forbidden to copy,modify and redistribute it.

Open Source software.This software is the result of volunteering as a result you have to understand that people who made it are not on your order and that one day you should have to contribute to the community or at least to consider them.

Cost

Family edition of Win XP:139€

Free

Ease of use

Because Windows is pre installed on almost all the computers sold in the world it is to my point of view the most easiest OS.

It has the reputation to be very technical even if they try to simplify it as much as they can.This is why most of the companies are reluctant to use it.

Stability

Windows is based on MS DOS which has the reputation of being less stable than Unix.It means that there is more chance that your system crash under Windows than on Linux.

Linux is based on Unix.

Mac OS is also based on Unix

Security

A lot of viruses detected which caused some serious damages

Few viruses detected and none serious attack detected

Support

Based on companies.You have to expect that they can solve your problem.

Mainly based on a community.You hope that they can solve your problem or give you the key to solve it by yourself.


OSS for companies: Main complaints about Linux

II-2.2.2- Main complaints about Linux

Before developing this part all user of Linux should know one thing:

Linux is not Windows under a free license

"It is logically impossible for any thing to be better than any other thing while remaining completely identical to it. A perfect copy may be equal, but it can never surpass. So when you gave Linux a try in hopes that it would be better, you were inescapably hoping that it would be different. Too many people ignore this fact, and hold up every difference between the two OSes as a Linux failure. "
Firefox was successful because it was better than IE, and it was better because it was different.
1st complaint: Linux isn't exactly the same as Windows
This complaint comes with the citation I copied above.Most of the people want to acquire a free legal software of Windows.Because they cannot find one they think about the Linux alternative and hope to find some Windows inside Linux.As we saw above Linux is not Windows under a free license.
2nd complaint: Linux is too different from Windows
To explain this complaint we could identify these two operating system as ways of transportation.For example imagine that Windows is a car and Linux a motocycle.Both of them provide you in a certain way the same service:to move you from A to B.They have a lot of common points(need some oil to run,you need to indicate when you turn etc...).
But they are different in many points(you don't drive your motocycle in the same way as you drive your car).
Users expect to drive a new car with Linux...whereas they have to pass their motocycle license.
I admit that this comparison is a bit too simple but the main idea of this complaint is right there.
3rd complaint: Culture shock
This complaint is also very interesting to analyze.
"Windows users are more or less in a customer-supplier relationship: They pay for software, for warranties, for support, and so on. They expect software to have a certain level of usability. They are therefore used to having rights with their software: They have paid for technical support and have every right to demand that they receive it. They are also used to dealing with entities rather than people: Their contracts are with a company, not with a person."
Linux users are in a community relationship. As a peer they don't buy the software, they don't have to pay for technical support. They download software for free & use Instant Messaging and web-based forums to get help. They deal with people, not corporations.
4th complaint:Linux is too technical
One slogan of Linux is interesting to analyze:
"By geeks, for geeks."
Most of the Linux users are geeks.
It's an open-source, fully-customizeable set of software. That's the whole point. If you don't want to hack the components a bit, why bother to use it?

OSS for companies: Linux


II-2.2-Linux


Maybe the most famous Open Source solution heard in the world but also maybe the one that most people speak about it without knowing what it really is.In this part we are going to discover this software and make a comparison between it and the giant Microsoft Windows.

II-2.2.1-Presentation of Linux

Linux or more officially under his real name GNU/Linux is an operating system such as Microsoft Windows.His logo is a penguin.This animal is to my point of view the symbol of the Open Source phenomenon.

Linux has the reputation to be cheap(actually it's free whereas Microsoft Windows is around 200 to 300 euros) and quite technical(this is one who scare the non IT specialists).

Finding some good and easy information about Linux is quite hard.The best source of information I found is on a French website called "Le site du zéro" which explains in a very simple way what is it and how to install it.

Linux is a huge software.It is distributed under a lot of names which have each of them some specific characteristics,here are some of the most famous:

Each of these distributions have a specific use,for example Ubuntu has the reputation to be the easiest version of Linux so for non IT specialist.Linux/Ubuntu is for people who are not use to work on a Linux environment whereas some versions which are more technical are more for computer programmers such as the RedHat distribution.

As a very simple comparison under Windows we will have such a scheme:

This scheme could be far developed for example under XP professional it exists also the pack for Small and Medium companies.

Here is the repartition of Operating System in France for professionals.

Système d'exploitation des postes de travail des professionnels français


Système d'exploitation

PdM septembre 2005PdM août 2005

Evolution

Windows

87,3%88,9%

-1,6%

Mac OS

3,0%2,5%

+0,5%

Linux

1,1%0,9%

+0,2%

Autres

8,6%7,7%

+0,9%


Source Benchmark Group

As we can see Linux is not a revolution but it is still taking some market shares on Microsoft Windows.


OSS for companies: Advantages and drawbacks

II-2.1.3-Advantages and drawbacks

The main advantage of this solution is that it is free.

The second advantage is that it has more functionalities that the other main suite office software:Microsoft Office.

The main drawback is that the format of the openoffice documents is not recognized by the Microsoft Office software.

For example a Writer document cannot be read by the Word software of Microsoft whereas a Word document of Microsoft can be read by a Writer OpenOffice software.

Another drawback is when an user swift from Microsoft Office to Open Office there is a delay of adaptation because even if Open Office seems as the first sight of a perfect copy,it has still some differences.These differences are for example some names,some added functionalities etc...

I read also that companies such as Microsoft prefer to have people who use some pirate copies of their software instead of using open source solutions which use a different state of mind and a different way of using the software.

OSS for companies: Price of the software and consequences of it

II-2.1.2-Price of the software and consequences of it


139 euros is the price of the suite office of Windows.

0 euros is the price of the OpenOffice suite office which contained the same functionalities as Microsoft Office but with two extra applications.

Because of this high difference of price, the use of OpenOffice.org comes to be more and more generalized, this is for example the case in the French admnistration

Some figures found on the Internet said that in 2004 OpenOffice had 14,3% of the market according to a Forrester Reserch study made on140 large North American companies .

OpenOffice.org becomes progressively a reference suite office software in the field of education,admnistration and the professional world.

OSS for companies: Open Office

II-2.1-Open Office

Because Open Office is to my point of view the software which the most used by public basic user(people which are not IT specialist) I think it has his place in this report

II-2.1.1-Presentation of the software

I will describe the Open Office software as an office suite with a lot of common points with the Microsoft Office software with exactly the same functionalities.

For example in this software you find the equivalent of Excel,PowerPoint,Word,Access of Microsoft Windows.

They are respectively named Calc,Impress,Writer,Base under Open Office and two others applications are added: Math(create mathematical equations with a graphic user interface or by directly typing formulas into the equation editor) and Draw(produce everything from simple diagrams to dynamic 3D illustrations).

OSS for companies: Some examples of some Open Source solutions(Linux,OpenOffice)

II-2 Some examples of some Open Source solutions(Linux,OpenOffice)


In the previous part we saw the figures about nowadays OpenSource situation inside companies.I would like now to introduce some Open Source software in order to see concretly what it is and then to guess step by step the pros and cons of choosing this solution as an alternative to proprietary software.

OSS for companies: Trends towards the Open Source Applications in the coming years

II-1.2 Trends towards the Open Source Applications in the coming years

Source:http://www.ioug.org/IOUG_Open_Source_07.pdf

As we can see open source adoption will keep growing over the coming year. A majority of respondents, 52 percent, say their use of open source software will increase over the coming year, versus only two percent that foresee decreased usage.

These figures show us that Open Source is not a revolution in the IT world.This is not the "Gold Rush" that we could have expected with 80% of increasing.

It could be interesting to analyze why we have only 8% of growth in terms of increase significantly and 44% of increase moderately instead of the opposite.

What are the brakes of this adoption can also be an interesting point to develop?

52% recognize that opensource is the future alternative for companies.

As we can see companies are ready to go towards the integration of Open Source solutions instead of decreasing them.Companies are more favorable to their integration.So we have here the recognition of this alternative.

However most of the companies are still prudent by integrating these solutions.They are not ready to migrate entirely to these solutions (Increase moderately: 39% and 46%).

There is also a big gap between the percentage of large companies which are ready to increase moderately the adoption of Open Source solution and the one which want to increase it significantly.


OSS for companies: Open Source Applications in companies

II-1.1 Open Source Applications in companies

All the graphics in this report have been taken from: http://www.ioug.org/IOUG_Open_Source_07.pdf

According to this report in 2006, companies which are running with a majority of Open Source applications is around 9%.In 2007 this percentage is around 13%.

A very simple and candid(because we just have two years to judge) analysis let make us say that there is a growth of open source applications inside companies.

According to this tab it is interesting to see that only 1% of large companies are running more than 50% of their applications under Open source whereas for small companies this percentage is around 24%

Another data is interesting: 43% of large companies are using between 1 to 9% of Open Source applications.

The analysis of these data give us some information.

1st :There is good chance that Large companies recognized the fact that Open Source applications are a cost saving.

But don't trust them enough to make them running their all computer park.

On the other hand small companies seem recognize that equiping the company with Open source applications is a huge cost saving.

What can be interesting is to understand why there is such a big gap?


OSS for companies: What his today the place of Open Source solutions in companies?

II- OPEN SOURCE SOLUTIONS FOR COMPANIES


II-1 What his today the place of Open Source solutions in companies?


It is not that easy to evaluate with precision what is today the world use of Open Source solutions.However a lot of market research have been made on this topic by taking a panel of hundreds of companies.Most of the results of these different panel are coherent with each other
In this report I took as a panel the work done by the IOUG (Independant Oracle Users Group).They made a recent survey in 2007 .This survey takes is based on 226 companies from small and medium to large companies.

OSS for companies: Brief history of the open source phenomenon

I-3 Brief history of the open source phenomenon

When computer age began the computer science was one of the sciences in which researchers shared freely the source code of their programs.

In the early 80ies this tacit rule of knowledge sharing changed.Editors began to sell their first software without distributing the source code: "Proprietary software" for example any commercial software such as Microsoft Windows.

So before the 80ies everything was Open Source.The open source phenomenon that we are hearing everyday has nothing of a new topic or a revolution.

Open Source as we said before was the beginning of the computer software.

Open Source is before all a way of thinking, a philosophy as we are going to discover it.People which are making open source software believe that everybody has something to win by making that kind of solutions.

The copyleft is a good logo of this state of mind:

It clearly shows his opposition to the copyright.


Copyleft:a legal instrument that requires those who pass on a program to include the rights to use, modify, and redistribute the code; the code and the freedoms become legally inseparable.

OSS for companies: Open Source definition

I-2 Open Source definition

There are a lot of definitions about Open Source.The best and the easiest definition I found was the one I made by crossing some different sources of information.

This definition cannot be well done without the describing what we call the "source code".
The source code is the intelligible and understandable version by a human being of a computer programme.
This source code is written in a language called "programmation",known by programmers.It described with words and formulas how the software is precisely running.This source code is not directly usable by the computer, it is therefore translated in a machine code or executable code.

Because now we know what is the source code we can easily explain what "Open Source" means.

Open Source definition: the code source of the software is available to users.

As a comparison if the Open Source software was a dish you could know how it has been made(his composition in fact).

The Open Source definition includes also the possibility of modifying,improving and redistributing it.

The opposite of an open source software is a proprietary sofwtare.

Proprietary software is a computer software with restrictions on copying and modifying placed on it by the creator or distributor.

I think you understood that as a comparison if a proprietary software was a cooked dish , it would be impossible to know its composition,neither the way it had been cooked.And it would be forbidden to try to guess.Impossible to improve the way it had been made, and forbidden to give a piece of it to your friend who is starving to death.