EasyJet online, Transmeta and OpenSource

Web's favourite airline

The cut-price airlines are proving that the internet can provide genuine business value. EasyJet's latest statistics show no less than 89.2 per cent of sales being made online. Following a late start, Ryanair has pushed well over half its bookings to the web.

Looking at the airlines, we can see that the internet opportunities are real enough. A year ago, EasyJet was taking less than 65 per cent of its bookings online, making the current figure a remarkable achievement. The shift is underlined by the withdrawal from advertising of the airline call centre's telephone number. Once, the planes had the number painted along the side - now they are decorated with the web address.

Traditional airlines such as British Airways would dearly like to achieve similar figures. At one time, BA aimed to sell half its tickets across the internet by 2004, but that target has been quietly buried, with current figures at a few per cent. The cost savings are huge. Cutting out travel agents and booking clerks reduces cost substantially, and the web provides a much lower cost distribution system than existing airline booking systems.

The barrier is complexity and the ability to deliver systems that are usable by the average ticket buyer. Hence, in principle, the airlines like the idea of establishing collaborative portals to compete with online travel outfits like Travelocity and Expedia. But they have yet to put together the necessary processes and technology, leaving the independent travel operators more time to establish themselves. Recent reports have shown the best known online travel companies breaking into profit.

Anecdotal evidence strongly suggests that ticket buyers like the ability to interact directly with booking systems. As the ingenuity of software systems develops to match the complexity of the airline booking process, it looks certain that this is an Internet service that is here to stay.

Chips get interesting

While Microsoft was still fighting for market share for its Windows operating system, and Intel held the standard for PC processors, the so-called Wintel alliance seemed rock solid.

Now the situation in processors is much more complex. Microsoft has established its dominance with Windows, and can happily work with alternative processor makers such as AMD or Transmeta.

Likewise, Intel has moved to distance itself from Microsoft, seeing fresh opportunities for processor sales through Linux. As it aims to move to 64-bit processing, Intel is also hoping to take a significant slice of the large scale Unix market, especially through its alliance with HP.

So far, AMD has been the most successful company to tackle Intel head on. Its processors operate in similar fashion to those of its rival, achieved by reverse engineering the instruction set. Technically however, Transmeta is a much more interesting proposition.

Rather than directly emulate Intel's processors, the Transmeta chip was designed with an
entirely different instruction set. In order to run familiar operating systems, such as Windows, it featured software emulation built directly on the processor chip. The result was claimed to be a cool-running chip that could outperform Intel's range.

And this is opening up new opportunities - particularly in the server space. A specialist sector of the server market is very interested in cool-running, low power processors. The rapid growth of servers installed in hosting centres involves an environment where space is critical. As many servers as possible are packed into centres where space that provides a suitable environment is a significant cost. The lower the power requirement, the less space is wasted with cooling fans, air conditioning and power supplies.

Financially, Transmeta has yet to prove itself. Early investors and staff have recently been freed of the launch restraints on trading, and on the peak day a quarter of the company's shares were traded. The company will no doubt argue that insiders wanted to freeze the benefits from options, but the scale of the trading suggests that they are not wildly optimistic about prospects. The shares now stand at about a quarter of the price achieved at IPO. But in a market with few effective players, it will be a pity if Transmeta cannot establish itself as a technically innovative challenger.

OpenSource forever?

OpenSource has become a mammoth movement with supporters globally with the inclusion of the mighty IBM and many ISVs. However some commentators still believe that the OpenSource model is destined to dissolve and disappear. Whether it will or not is still a point of debate. However, it is worth asking whether it is actually fulfilling the intentions of the innovators that set it on its way. How close is it now to its original conception?

In the eighties, a very interesting and intelligent individual had great vision and plans for a "free software movement". The world was a little different in those days, but the original intention was "free" software, as in "free" speech rather than "free" beer. The point was to circumvent the proprietary restrictions that the industry imposed with its communities of vendor interest.

This point still confuses many people and particularly the corporate world of today that does not yet understand the Linux message. In a way the open software model has great similarity to the Napster model, without the illegality of copyright violation. A community of interest supports the software it uses and the community decides who pays what - and as it turns out, it is possible for the community to pay with little more than effort on behalf of some of that community.

OpenSource software should be liberating and remove the restrictions that are imposed on implementers of proprietary technology: costly tie-ins, legal wrangles, the unavailability of source code, artificial pricing and so on. Nevertheless the term "OpenSource" cannot be confused with the word "commercial". The revenue models are distinctly different. Commercial OpenSource organisations exist but they have to add value in a different way - not through the software license itself, as can be seen today. However, their revenue streams from dealing in this market will be dwarfed by their commercial counterparts because they do not have the leverage of copyright.

Some companies that deliver Linux or other OpenSource software have seen difficult times and undergone mergers with similar outfits, but the same kind of rationalisations happen in the "commercial" software companies - and OpenSource continues to continue.

Open Source has to this day kept close to its original conception. Indeed statements of the goals of GNU project pioneer Richard Stallman can still be found on his personal website (http://www.stallman.org ). He is the instigator of the free software movement and a relatively unsung intellectual guru. Well done Richard, you did it!