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Linux Sneaks into the Small Business Marketplace

Free and open source solutions are providing small proprietors the opportunity to up productivity while reducing their overhead costs.
December 28, 2004

Chris Shank and Mitchell Perilstein, the owners of Ace Technology Group, save their Philadelphia-area small business clients money and make their computers more reliable by installing Linux and other open source programs.

But they don’t sell Linux or even tell clients they’re using it unless they ask, which most of them don’t since they are mainly interested in having their systems run as smoothly as possible for the lowest cost, and don’t care what software Ace installs as long as it helps them achieve those two goals.

Ace is one of a growing number of information technology service companies that use Linux and open source software to win computer installation and maintenance contracts from cash-conscious small business managers.

“Our main strategy is to reduce their costs by preventing problems proactively,” says Perilstein. Ace accomplishes this typically by remotely monitoring clients’ computers so that they can “catch some problems early,” including “some we can fix before the customer notices [them].”

Shank says that once they’re in a client’s door, the way Ace earns long term trust is by providing “responsive help remotely. We don’t take hours to answer a service call.”

The lack of licensing fees associated with most open source software helps keep initial costs low, but the real savings come using two programs – OpenSSH and rsync – which make it easier to administer Linux remotely while also managing secure, remote data backups over the Internet. While there are third-party software tools available that allow remote administration of Windows computers, this capability is inherent in Linux.

These two tools, used together, virtually eliminate the need for onsite service calls to solve software-related problems.

With business owners looking for cost-effective solutions, not only service companies such as Ace Technology Group, but also product vendors including New York-based Symbio Technologies are creating an expanding array of plug-and-play Linux solutions for small business.

Symbio Technologies sells servers pre-loaded with Linux and low-cost diskless desktop units that run programs from the server instead of acting as standalone computers, in effect creating a plug-and-play Linux system for small businesses.

A Symbio desktop unit costs as little as $200, plus monitor, and has only a minimal operating system that is automatically loaded from the server each time it is turned on. Symbio’s servers start at $3000, and even the smallest ones can power between five and 10 workstations, says Symbio CEO Gideon Romm, “depending on the number of applications they’re running and how resource-hungry [those applications] are.

Since the server runs all the software, it is the only part of the system that requires an administrator’s attention. A small business that now spends $2000 per desktop per year on software maintenance and security for 10 desktops – a total of $100,000 over a five-year span – can cut that amount to $10,000 over the same time period by running 10 diskless workstations from a single server.

During the purchasing process, Romm says, there are three questions that business owners ask: “Will it support the files I have? Will I continue to be productive? How different will the new system be?”

Once they are satisfied that that there will be little change in their overall operations, he says, the rest of the sale is easy.

“Small businesses are okay with going to whatever program that does what they need done,” says Romm. “They don’t need or care about all the bells and whistles of Outlook or Microsoft office. They’re happy to go to (Linux-based email client) Evolution or (open source office suite) or some product like that.”

The difference between Symbio and Ace is that while Ace is primarily a service company with an intensely local client base, Symbio has packaged an entire hardware and software system that can be installed easily by anyone who knows even a little about Linux.

Symbio reseller Ranbir Sandhu, who owns Systems Aligned, Inc. in Toronto, Canada, says one of his larger clients is a local investment firm that had all its records on paper before he installed a new Linux-based system for them.

“They didn’t care what was running on the backend, but we’re always, not pressing, but saying to them that it’s open source,” Sandhu says. “As long as it solves their business problems, they’re happy with it.”

Sandhu started his tiny company as a partnership with a friend when they both graduated from college two years ago.

“It was either get a job or try something on our own and see if it would be successful,”’ says Sandhu. “We started out doing it all – Windows, Linux, whatever – but decided Linux was where we wanted to be at.”

The friend has since moved on, but Sandhu has managed to make the business profitable, and has even gained a small bit of fame in Linux circles for winning a bid to supply a Symbio thin client system to the North West Catholic School Division 16 in North Battleford, Saskatchewan. He not only won the bid, but also beat out the Windows-based competition by a huge margin: his price, including software, was less than half of his competitor’s quote.

But while Ace and Simbio successfully migrate small businesses from Windows to Linux servers, Linux on the desktop hasn’t been as easy to sell. According to Shank, Linux is currently running on only about 10 percent of all the desktops Ace supports, but a growing number of their clients are running at least some open source software on their Windows desktops.

A major reason Windows desktops are still the rule, not the exception, is that many businesses depend on specialized applications that only run on Windows. For example, right now Ace is in the process of installing 59 Windows thin clients for a medical practice, which has a critical piece of software that only runs with Windows and Internet Explorer.

The client would be happy to run Linux desktops and save license fees, Shank says, “but mostly the app just won’t run [on anything other than IE]. It browser-detects and bombs.”

Shank says the company that makes it isn’t currently interested in supporting anything but IE, so for the moment his client is stuck with Windows even though his servers run Linux.

But many software publishers, from Oracle on down, are starting to provide Linux versions of their products, which means Windows on the desktop is less a necessity each year.

Even without “stealth” sales tactics, Linux is growing in popularity – and credibility – among small business owners.

More and more, Shank says, clients specifically ask Ace to switch at least some of their systems to Linux, even if they don’t fully understand open source licensing or know how computer operating systems differ from one another.

The reason, says Shank, is that “some people like to brag that they’re on the forefront of technology. Basically, they like to brag to their golf partners about it, and they’ve all seen Linux in IBM ads and think it’s cool.”

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