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Re: Gartner Group nails coffin on linux

copyright 1997, Rex Ballard

In article ,
  teknite77@hotmail.com wrote:
> I don't like Linux, but the Gartner group is, and always has been way
> off course.
> 
> They are like the Physic hotline. 
> Has anyone actually kept statistics
> of their predictions.

Gartner has made many interesting predictions:

   In 1993, they predicted that Windows NT (3.5) would dominate
            the Desktop market with 80% within 2 years of it's release.
            (NT 3.5 became 3.51 and both failed miserably).

   In 1994, they predicted that the Internet would grow to 6 million
            users by 2005.  (later that year IDC estimated the user
            base was already nearly 16 million)

   In 1995, they predicted that Windows 95 would have 80% of the
            market by 1997.  (Windows wasn't even close to being
            released yet, and Windows 95 didn't install on legacy
            hardware very well, if at all).

   In 1996, they predicted that Windows NT 4.0 would have 80% of
            the internet server market by 1998.  Today, NT has
            less than 30% of the server market.


   In 1997, they predicted that Linux would never be a dominant 
            player in the server market.  Today, Linux has 30% 
            of the server market with BSD (freeBSD, NetBSD, 
            and BSDi) holding another

How could they have such a lousy record?

Actually, Gartner bases it's predictions on predictible events.

For example:
If 95% of all businesses are growing at average rate of 10%/year over 5 years, then there is a 95% chance that Linux will grow at 10% year too. In 1995, the predictable rate of growth for the Internet would be for it grow at 20%.

Gartner uses the most conservative numbers available when estimating market size. At the time Gartner made their Internet prediction, there were about 1 million registered host IP addresses. Gartner had no proof or accurate statistical sample of how many users were attached to each address, so Gartner assumed 1 user per address.

The later IDC report based it's estimate on the number of e-mail addresses registered with nic servers (which was still under the mark). It wasn't until the following year that accurate counting mechanisms were available. By then, the user base had grown to about 40 million users.

Gartner analysis does not attempt to factor in innovations and breakdowns. If Microsoft released a product (such as Office) in 1992 and that product took 40% of the market per year in the first two years, the assumption is that their next product would have the same penetration. Until there is tangible and verifiable evidence that there will not be such acceptance, Gartner can only go an the basis of past performance.

In 1979, any technical analyst would have told you that by 1999, interest rates would be 40% or higher, gasoline would cost $10/gallon (if you could get it), and unemployment would be 30% or higher. Because that was the economic trend from 1976 to 1979. Prices rose, inerest rose, unemployment rose, demand of fuel increased, and unemployment increased.

But here we are, in 1999, with the the economy in the best shape it has been in this century.

What Gartner couldn't predict was that someone at Dow Jones would start passing out copies of Trumpet and Mosaic, would give 8000 publishers detailed instructions on how to create their own server that would be accessible through a shared online services being developed by MCI that would be shared with AT&T, Sprint, British Telecom, and every other major telecommunications company.

When you think about it, the probability of any one of those things happening would be nil. Publishers do not give away trade secrets. Online services do not provide unlimited access to any server wishing to attach. No one would use share-ware for anything other than games, and MCI would never allow interconnectivity directly with it's competitors.

But here it is, 1999. Nearly every telecommunications carrier has the capacity to route TCP/IP traffic. The adoption of these standards and the interconnectivity has resulted in mergers that would have been science fiction 20 years ago.

These are breakthroughs, events or shifts in thinking, policies, and relationships that were "never going to happen".

To Gartner's credit, once they could identify a breakthough thay immediately and radically altered their predictions. It's not that Gartner is incompetent, they are just responsible.

Tracking a breakthrough industry like the Internet or Linux is incredibly hard. The industry is densely populated with people who produce breakthroughs on almost a daily basis. In addition, there are breakdowns. There was no indicator that thousands of Windows 3.1 applications would fail under NT 3.5. There was no indicator that Windows 95 would be nearly impossible to install on a VLB machine (which comprised 60% of the market and 90% of those most likely to upgrade).

Linux is even more difficult to track. There are 5 major Linux distributor companies who generate their own distributions. What makes this very unusual is that they compete primarily on the basis of service. Each uses almost exactly the same software packages, but each competes by asking "What would make it easier for a user to use this system".

Even the "user" has shifted. Up until 14 months ago, most Linux systems were focused on the "user" who was using Linux as a server, or the administrator "users" of that server. In reality, it has only been since the releases in May and June that releases were directed toward a "desktop user". Many prior users used Linux as a desktop machine, but they were willing to deal with some configuration chores to have a workable machine.

Linux can effectively appeal to three different markets:

The power user. These are the people who bought the first copies of Windows 95 and tried to install it themselves. These are the people who used NT on their desktop. These are the people who created their own web pages using HTML. If they could afford it, they'd have a Sun ULTRA workstation or an Indy, but Linux on a 500 Mhz Pentium III would be a pretty close second choice. Maybe next year they'll get the ULTRA.

The low-income user. These are the people who couldn't afford to pay the $1000-$2000 for a machine preloaded with Windows NT and Office 97. Some of them may have been the software pirates that Microsoft despises anyway. In this case, Microsoft isn't even loosing the market, but Linux is gaining an invisible one.

The appliance user. These are people who really don't know or care what the operating system is. They want something as reliable as their television or their telephone, that they can use for days at a time without even thinking about CTL-ALT-DELETE.

Appliance users aren't just the "set-top-box" crowd either. They are the clerks at millions of retail and franchise stores (many of whom have used ANSI terminals connected to SCO servers for years. They are customer services clerks who have to try and keep an irate customer from hanging up while their MS-Windows console reboots.

Gartner has some sense of the size of the "power user" market (about 10 million), and one could estimate the appliance user market by comparing it to the number of cash registers in the world, adding the number of televisions, and then adding the number of cell-phones.

The last market, on which the Gartner author was focusing, was the existing Microsoft PC Windows user market, specifically the Windows 95 and Windows 98 markets. Based on Gartner's requirements to base prognostications on predictable events, it's easy to see why this Gartner analyst would make this prediction. In 20 years, no one, not even IBM, with OS/2, has displaced Microsoft in it's establish market. DR-DOS tried and failed, OS/2 tried and failed, GEM tried and failed, Novell Tried and failed, Coherant tried and failed, and Sun tried and failed. What is predictible, based on statistical evidence, is that Linux will try and fail. Statistically, if they use the same strategy that everybody else has used, they have, a best, a 4% chance of gaining any market share in the first year, and would die on the vine in the second year. The most penetration they could get, based on the past failures, would be 1%. OS/2 had 4 million users in it's best year after the break with Microsoft. That represented about 1.2% of the total market at that time.

What this author doesn't take into account is that Linux is not using the same tactics as previous contenders. In much the same way that the U.S. minute-men were able to win independence from the British by shooting from behind trees, Linux has already gleaned a 4-5% market share by offering dual-boot options, coresident operation, and forming alliances between the top 5 distributors and the top 10 computer manufacturers.

Finally there's the Anti-trust factor. The DOJ has already successfully staged a very successful campaign against Microsoft. Even if there are no consequences (Microsoft wins in appeal), Microsoft suffered heavily in the press, and once the vendors began breaking ranks, many of Microsoft's carefully woven nondisclosure agreements and secret business practices became unraveled.

Microsoft is already watching it's back, and the DOJ is already collecting the evidence for other charges. Microsoft courtroom antics have been getting almost as much press as their press events.

The analyst assumes that all 600 million Microsoft Windows users (3.1 through 9x and NT) are happy, satisfied customers, with no unfulfilled expectations, and no unpleasant experiences. But if an analyst were to take customer satisfaction surveys which asked questions such as: