Linux preinstalls rocket to three per cent

By Mark Ballard

Aug 4 2008 8:12AM

Linux has made headway in Microsoft's UK heartland, the PC sales channel.

The number of machines shipped with Linux preloaded on them has multiplied a whopping 28 times since Microsoft launched its Vista operating system in January 2007.

Sounds impressive, but Linux was starting from a rather small base in traditional sales channels: of all PCs sold in the UK last January through indirect channels, a feeble 0.1 per cent had Linux preloaded, according to numbers given to us by market research firm Context.

The Linux share of this route to market has edged up ever since the Vista launch. Then it broke the two per cent barrier in May after the latest release of Ubuntu, the strain of Linux most capable of kicking Microsoft in the shins.

Microsoft is still being shipped with 93 per cent of all PCs sold through distribution in the UK, according to Context.

Yet Linux has nevertheless made an impressive gain. The UK's distribution business was built around the arteries of marketing money flowing from vendors - money they earned from selling their software.

You might say that the distribution business is dependent on the marketing funds it gets from vendors.

Microsoft spends three per cent of its UK sales revenue on marketing funds given to distributors and resellers, said Rod Baptie, managing director of sales consultancy Baptie & Co,

"It would be a foolish distributor who took a product if it wasn't marketed for them."

In the late 1990s competition was so keen that distributors were said to sell at or below cost and take their profit direct from the marketing funds they received from vendors.

Vendors nowadays keep watch to see their marketing funds are actually spent on marketing, but distribution runs on single figure profits and vendor marketing funds are a crucial aid.

As most everyone in the UK sales channel sups on Microsoft's marketing teat, Linux hasn't got a hope in hell bar customer demand. So its record of 2.8 per cent of all preloads in June is something to be noted.