Open source certainly now is "good enough" for the needs of most end users who merely use their computers for simple office productivity work, Webbing, and e-mailing. As any Tux-lover can tell you, a good case can be made that open source desktop offerings can handle those basic jobs better than the products of the desktop market leader. So it would appear that world domination is right around the corner.

Again, why is world domination taking so long? One good answer for this big question can be found by reading the work of Harvard theorist, Bhaskar Chakravorti, PhD, who is currently one of the partners at the Monitor Group consulting firm. Essentially, Dr. Chakravorti believes it boils down to the old chicken-and-egg question: not enough people are selling open source solutions for the desktop because, well, not enough people are demanding desktop open source solutions, and vice versa.

How Did We Get into This Chicken-and-Egg Problem in the First Place?

Dr. Chakravorti describes the chicken-and-egg problem as being caused by what he calls the "market equilibrium" of the business network of the market incumbent. Think of "market equilibrium" as the difference between a successful shopping mall and an unsuccessful mall. People go to the successful shopping mall because the mall owner pulled together various stores that would attract the public before opening the mall. On opening day, the public arrived in droves. The mall earned a reputation for crowded parking lots. This reputation ensured a long list of stores waiting to rent space in the mall. The quality of stores continued to improve. Better stores brought more shoppers, etc. Stability sets in for both buyers and sellers in the mall. That's how "market equilibrium" starts and continues.

In the case of the computer desktop market, players on both the demand-side (buyers) and the supply-side (sellers) are more or less comfortable with the basic rules of the game of shopping at the Microsoft "mall." Independent service vendors (ISVs) write their applications for the Microsoft platform because they know that buyers will demand compatibility with Microsoft standards. Both buyers and sellers value the predictability that comes with playing in the Microsoft-centric business network (aka, the Microsoft "mall").

How to Build a Better Software "Mall"

You build a better mall the same way the first mall was built, except in the case of a disruptive technology like open source, you start small. It's a well-known historical fact that Linus Torvalds didn't set out to unseat Microsoft. He started small. Momentum built slowly, and eventually the Linux "mall" attracted some big "anchor tenants," such as IBM. Gradually, other stores started coming to the GNU/Linux mall.

In Dr. Chakravorti's words, key supply-side players like IBM, Novell, Sun Microsystems, Hewlett Packard, etc., began offering demand-side players switching incentives, such as the ability to use legacy data on a new system, low cost, control over the code and its behavior, etc. - all the stuff that we Penguinistas have come to know and love about software libre.

The question, of course, is who has the guts to take on Microsoft? Like every market incumbent before it, Microsoft has the resources, processes, and values it takes to provide the products and services demanded by customers who will pay value for the functionality that their goods offer. Like every market leader before it, Microsoft will use its substantial clout to defend its territory.

Does this mean that the Microsoft fortress is impregnable? To the contrary, as I outlined in "Rumors of Microsoft's Demise Are Premature...But Not Unthinkable," in the November issue of LWM (Vol. 2, issue 11), Christensen, Raynor and the other gurus on the Christensen team have documented that between 1955 and 1995, 95% of the members of the Fortune 50 list have stalled to the point where their growth did not exceed the rate of GDP growth.

In each case, according to the Christensen researchers, the market entrants have avoided the wrath of the market incumbent by not competing for the market leaders' best customers in the early stages of the game. The successful entrants have offered products that were not interesting to the market leaders' best customers.

The classic example is Sony's transistor radios, whose signals were too weak and whose sound was too fuzzy for adults who purchased market-leader RCA's high-margin desktop radios and box set TVs. Sony was free to sell its transistor radios through nontraditional channels, department stores, to 1960s teenagers who didn't care about the weak signals and poor sound quality. Those teenagers were more interested in getting away from their parents' control, and they listened to their music by holding the radios up to their ears or in small groups, where the signals and sound quality were "good enough."

Professor Christensen was recently quoted as saying that Microsoft would do well to buy a company like Research in Motion (RIM), the maker of the popular BlackBerry handheld, as a way to make a foray into open source. Otherwise, Christensen told CNET reporter Martin LaMonica, open source could "undo" Microsoft (http://news.com.com/Advice+to+Microsoft+Learn+to+love+Linux/ 2100-7344_3-5411843.html).

In Chakravorti's language, the alternate market equilibrium (the Linux "mall") is being built by players such as Novell, IBM, HP, Red Hat, Sun Microsystems, Progeny, and Flexiety.com, who are catering to today's equivalent of Sony's teenagers. These players did not start out by offering products squarely in Microsoft's path. Rather, they began their deployment of open source solutions in areas such as servers, routers, and other back-office plumbing supplies.

It's only lately that these desktop software "market entrants" have started offering solutions for the desktop and, even then, players such as Red Hat made clear that their desktop offerings were intended primarily for smaller networked commercial settings, not the consumer desktop space that Microsoft dominated. In fact, even as recently as October 12, 2004, Anthony Long, the principal of Flexiety.com, announced in a Newsforge interview that his company had won a deal with CompUSA to package OpenOffice.org plus support for the consumer desktop, and that the deal was aimed at a sweet spot that Microsoft didn't occupy:

We don't see ourselves as going up against Microsoft Office, per se. What we see ourselves trying to go after is the consumer who wouldn't normally buy Microsoft Office. These are the customers who get an application like Microsoft Works on their machine and they need something more powerful, but they don't want to spend $200 to $400 dollars for a software program like that, and they really can't afford to....So this is for your small office or home user. OpenOffice.org is better and more powerful than Microsoft Works, but not as, it's almost as highly functional as Microsoft Office. It's right in that middle ground for that consumer who wants the features and functionality of Microsoft Office but doesn't want to shell out a hundred, two hundred, three hundred dollars for it. http://trends.newsforge.com/print.pl?sid=04/10/12/1333238

Likewise, the OpenOffice.org's marketing team has decided to take a page from the Christensen team's play book and pursue a disruptive strategy that avoids a direct confrontation with Microsoft:

"The [OpenOffice.org] Project is ideally placed to target 'current nonconsumers,' a classic market for [emerging] market disrupters." (John McCreesh, The OpenOffice.org Strategic Marketing Plan 2005-2010, version 0.5, published by the OpenOffice.org Marketing Project, 2004, page 45.) http://marketing.openoffice.org/strategy/#30

In his interview with us for the Digital Tipping Point, Dr. Michael Raynor, coauthor with Christensen of The Innovator's Solution, said that open source is likely to succeed first in markets where its modular nature helps users tweak the code to their unique needs, and where their relative lack of integration with Microsoft's latest products wouldn't be a deal breaker. In fact, my experience in traveling and researching for the film seems to bear this out. The City of Sao Paulo, home to 16 million people, has successfully deployed OpenOffice.org and Linux in the administrative offices of its subway system, the Metro, and in 120 telecenters in the favelas (slums) outlying the city. In both of those cases, OpenOffice.org and Linux permitted the institutional users to meet their needs at cost points that Microsoft couldn't reach and doesn't really care about.

Start at the Bottom of the Pyramid

While there have been big open source successes already in the enterprise market, the bigger potential for desktop open source lies in the developing world. According to Clay Christensen, Scott Anthony, and Erik Roth, coauthors of Seeing What's Next, the third in the three-volume disruption theory series, the potential for low-end and emerging market disruption is simply enormous. Of the world's 6 billion people, only 1 billion or so live in countries in which the average income exceeds $10,000.00 USD (as of November 2002).

The remaining 5 billion people or so live in countries with incomes below that mark. As the authors of Seeing What's Next explain, companies that address the needs of those customers stand to develop the resources, processes, and skills to move up market and compete in the upper one-sixth of the income pyramid:

Nonconsumption is rampant at the bottom of the pyramid. Establishing a foothold here gives a disruptive upside of close to 6 billion people. Consumers in some of these markets could be very happy with very little....This is why leaping downward can be so powerful. Finding an economical way to create low-cost products creates a business model that can be a real strategic asset. The business model serves as a platform from which a company can disrupt competitors in other markets.

As an example of this potential growth, the Christensen team cited the example of a manufacturer of small cheap microwave ovens, called Galanz, a company run by Qingde Liang:

Galanz started small. Its domestic market share was a meager 2 percent in 1993. But sales steadily increased. Liang took advantage of economies of scale to reduce the product's price and reach a growing number of Chinese consumers. By 2000, it owned the Chinese market with a 76 percent market share. Once Galanz created a business model that could be profitable at low price points, investments to add features and functionality to its product - first for higher-end Chinese customers and then established customers in developed countries - loomed as very profitable and attractive. Galanz moved steadily up-market to build larger microwaves with more features, beginning to disrupt microwave oven markets in developed countries. By 2002, its global market share was 35 percent.

Desktop disrupters such as Sun Microsystems are poised to capitalize on this emerging market growth. At Comdex Las Vegas in November 2003, Sun Microsystems CEO Scott McNealy announced a Sun deal with the Chinese government and the PRC-based China Standard Software Company, LTD., for the multiyear distribution of approximately 200 million seats of Sun's Java Desktop System, renamed for China as the NeoShine Linux Desktop Series (http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/11/18/BUGRM34CUC1.DTL).

It's Not All in a Day's Work

Rome wasn't built in a day, and Tux's "global domination" of the desktop also might take a year or two. In fact, the OpenOffice.org marketing team is giving themselves until 2010 to hit a 50 percent market share. Neither the OpenOffice.org team, nor Novell, nor Sun, etc., can expect to "phone in" their theft of market share from the current market leader. But if business thinkers like Dr. Chakravorti and the Christensen team are correct, the news from around the world seems to indicate that market equilibrium is tipping in Tux's direction.