The Bloor Perspective: XP v Linux as an embedded OS, services in 2002, and surveying servers

Microsoft started it. On 28 November it posted an online document that set out to explain why Windows XP should be the natural choice for an embedded OS. Naturally, the Linux contingent was never going to let that go unchallenged and so now we have the makings of a hype war.

If we deal with this chronologically, the original Microsoft document sets out by explaining that an embedded OS needs to be extensible across all projects, it needs to deliver rapid time to market and it needs be able to support new and emerging technologies. All of this must be delivered at the lowest possible cost.

OK so far but then it tries to say that Linux is not up to the job and, of course, Windows XP is. That's where the document gets quite entertaining. It sets off down a long list of comparisons between embedded XP and Linux covering such issues as the fact that Linux is not as feature rich as the Microsoft alternative - it doesn't even have its own browser.

Thankfully, both Lineo and LynuxWorks have responded to make the appropriate rebuttals. The latter has gone to some effort to explain that the smallest XP implementation gives "extremely limited functionality" and uses nearly 5MB whereas the same capabilities can be made available with LynxOS in 150 KB. It also points out that the bloated nature of the XP solution makes performance a likely issue.

Lineo attacks the lack of choice (and monopolistic attitude) that comes from having every facility incorporated into the Microsoft solution. It defends the whole open source approach where the creators of each embedded solution have a choice of which Linux OS, which development tools and which browsers to use.

You have to say that Microsoft is on a complete loser here. As always, it's a case of choosing the right horse for the particular course. Embedded solutions demand a sleek, low-cost operating system with the absolute minimum of function and demand on resources.

The Linux approach may demand a little extra in terms of development to get exactly what is required but it starts on the right side of the fence.

Windows XP may well be the best and most reliable version of the OS ever - but that isn't saying much. It is not a flat racer. In embedded terms, it is a blinkered and rather overweight old nag that will never be able to get down to the correct weight for this race.

What future IT services?

There can be no denying it's been a good year for outsourcing and 2002 looks just as good. It's not been quite so good for IT service providers - Cap Gemini Ernst and Young, among others, has made significant staff cuts this year as the marker has slowed. Just the other day GuardianIT announced its second profits warning this year.

What have the IT services companies got to look forward to in 2002?

One general trend we've seen among them is an almost desperate desire to move up the value chain, unsurprisingly towards higher value consultancy services. Pre-merger talks, Compaq announced an intention to move into IT services. Post-merger? Well it's anyone's guess where Compaq is going, with or without HP.

Getronics recently signed a three-year deal with Barclays worth £57m. The contract is a renewal of the arrangement where Getronics provides maintenance and installation services to Barclays branch and office infrastructure.

Another Dutch company, Pink Roccade (formerly known as Pink Elephant) has announced its acquisition of Computeraid to expand its UK market position for medium-sized enterprises. Pink Roccade, like Getronics, is an acquisitive company having bought the outsourcing line of business from ECsoft, another IT services company, at the start of the year.

So we're seeing the consolidation that would be expected in any evolving market especially at the tier two area. The market is there - it's just a case of finding the customers and developing them. Most of the IT services giants have simply paid lip service to the SME market with various initiatives announced. They boil down to receiving a reduced, rather than scaled down level of service, and that's not likely to change while there are large enterprise budgets to chase after.

So next year really is the year of opportunity for IT services companies. They need to offer solid value for money and then, like any organisation, they need to deliver.

It's a cut-throat jungle out there...

For the second quarter in a row server sales have been marked by a distinct downturn. The third quarter of 2001 fell back by 7 per cent to a total of 248,000 units shipped across Western Europe. 2001 revenues were no great result either - losing 21 per cent, compared to last year, leaving the market with a moderate $3.26bn to fight over.

According to Gartner the server market was faltering for one primary reason - the economic downturn. This has resulted in organisations postponing potential upgrades and instead spending on maintenance and upgrades at the low end of the server market - the cheaper end.

This has sorely affected high-end server units - Unix boxes, predominantly - which saw a massive collapse in revenues throughout Q3. Shipments of Unix servers fell by 36 per cent while revenues followed suit with a drop of 33 per cent.

Never has it been more crucial for vendors to assert their dominance. And this past quarter has seen quite a fight. In Western Europe, Compaq managed to retain the number one position for total server shipments - despite losing some ground. IBM came in second place with 45,400 units shipped. But Dell managed to have a wonderful quarter, gaining 3 per cent of the market to give it a total market share of 14 per cent.