Jupiter: SMBs eye open-source as Microsoft alternative

Some price-sensitive small and midsize businesses (SMBs) are turning to Linux and other open-source products as a lower-cost alternative to Microsoft Corp.'s ubiquitous business software, Jupiter Research found in a recent study.

Surveying several hundred businesses of less than 1,000 employees, Jupiter found that 19 percent are using some form of Linux on their desktop computers. Six percent said they use OpenOffice, an open-source suite of productivity applications, with an additional 3 percent reporting plans to deploy it in their next fiscal year, according to Joe Wilcox, a Washington, D.C.-based Jupiter Research senior analyst.

The sticker shock associated with Microsoft products, and the increasing ease of accessing open-source software, are leading small businesses owners to try products like the free OpenOffice and Red Hat Inc.'s Linux distribution, Wilcox said. Small businesses often buy their software at retail outlets, and when Red Hat's Linux distribution is on sale next to the latest version of Microsoft's Windows operating system for a quarter of the cost, the price difference can lead thrifty shoppers to test the cheaper option, he noted.

"At the very smallest end of the market, the buying pattern of businesses is very similar to that of consumers. They're more willing to experiment," he said. "They're very price-conscious, and the (logistical) impact of bringing Linux into a company with three employees or five employees is pretty minimal compared to bringing it to an enterprise with thousands of employees."

As Microsoft looks to win more business from the SMB market, it also faces obstacles in the way it's perceived: 52 percent of those surveyed by Jupiter said Microsoft is focused mainly on its own interests, with just 4 percent saying the company is focused on customer interests.

"Small businesses don't feel that Microsoft is addressing their needs. When you look at the fragmentation of the market, they may also be telling Microsoft the same thing in their buying," Wilcox said.

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