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Microsoft continues its domination of the system software market thanks to the launch of Vista OS. But the rest are girding up as well
The Giant from Redmond might be under some pressure across the advanced markets due to a variety of reasons ranging from anti-trust to free software; nonetheless it continues to rule the Indian software market. Though there was a single percent drop in Microsofts market share, much like last year, it continues to command more than double of all Linux strains put together. The crucial factor in continuing reign is the arrival of Vista in India.
The Indian consumers have lapped up the operating system. Since the consumer launch in January 2007, nearly 180 mn Windows Vista licenses have been sold worldwide, and the adoption of the OS in India has already crossed over 2 mn units (consumer + enterprise) and growing at quite a high rate.
The reasons are not hard to guess. With every launch, Microsoft keeps enlarging its reach and even though it has over 13 offices across India; it has set up a distribution network that spans across the country. In fact one of its major focus is the SMSP (Small and Mid-Market Solution and Partners) space, for instance in India, Microsoft is working with over 3,500 partners only for the SMBs.
And even though it might have a robust channel strategy in place, it is constantly exploring new ways to reach out to the consumers, be it LFRs (large format retails) or online. Slashing prices for retail packs of Vista consumer editions was another strategy to attract traction. This benefited individuals purchasing Vista stand-alone copies. The price reduction varied from 13% to 39% and was applicable only for Vista Home Basic, Home Premium and Ultimate editions.
System Software: Top Players
Systems Software Revenue (in Rs crore) Growth
FY 08 FY 07
Microsoft Windows *1 568 454 25%
Linux *2 237 205 16%
Sun Solaris 180 150 20%
Novell Netware 117 60 95%
HP Unix 110 73 51%
Others 30 18 67%
Total 1242 960 29%
Others include IBM Unix, SCO Unix etc. Source: DQ Estimates
*1 (includes Windows Vista, XP, Windows Mobile)
*2 (includes Red Hat, Novell SuSe, Ubuntu and others)
Windows is still tightly fastened on the growing aspirations of competing operating systems, especially now that Vista too has found more than 2 mn takers in India. Albeit, there is a Linux challenge (read Red Hat), but what would please some old timers is that India remains a happy Unix-land with flavors like Solaris, HP-UX and IBM enjoying a good revenue share
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Another big boost for Vista has been the adoption by the big businesses Infosys has already migrated over 11,500 desktops to Vista, TCS migrated over 6,000, Satyam some 15,000 desktops to Vista, Larsen & Toubro deployed over 2500 PCs on Vista, and the list goes on.
The Center for Railway Informat-ion Systems, the umbrella organization for all computer activities in Indian Railways was another Vista convert.Built on Vista, the Control Office application ensured that the 17 mn passengers who travel by the Indian Railways every day and users of its freight services would get real time information on the exact location and arrival and departure times of all trains on their phones.
The biggest bugbear for Microsoft, however, continued to be piracy. At a high as 69%, again marginally lesser than the previous years. The company is adopting a variety of measures to combat piracy from cutting down prices to getting the culprits behind bars. Meanwhile, XP is on its way out, being actively replaced by Vista. Last September, Microsoft announced that Windows XP would no longer be available for purchase from Microsoft for general retail and OEM partners (June 30, 2008), system builders (January 31, 2009) or Windows XP for ultra-low-cost PCs (June 30, 2010). Thus the shift is well and truly underway, and the company hopes to dominate the market with Vista, much in the same fashion it did with Windows earlier versions.
For the Linux Penguin FY 08 was a mixed bag. Like Microsoft, there was a marginal drop in Linuxs market share, but it continued to grow nonetheless. The traction for Linux has come from some obvious and not so obvious quarters, namely the enterprise segment. There has been a realization that beyond the political and ideological issues, Linux indeed has quite a few benefits to offer, namely, low cost of ownership, no security threats from virus attacks coupled with no piracy related issue. Thus for many government projects like Supreme Court promoted e-courts project or e-posts launched by the Department of Posts, Linux was the obvious choice.
Competition? What competition? Windows market share is still more than Linux and all flavors of Unix combined. Microsofts reconciliatory overtures towards competitors should therefore not be construed as a sign of dwindling fortunes of Windows. In addition, even on the mobile OS front, Windows Mobile enjoys market lead over Symbian, Blackberry and the likes
A lot of telcos that have gone in for Linux, like Virgin Mobile for VAS applications, VSNL for their managed services, Reliance ADA in its data center, entertainment, and capital business. Even some of the media companies seem to have taken a liking for Linux, like, HT Media group, Indian Express, and Times of India. Among the Linux distributors, Red Hat is the undisputed leader in India, accounting for around 84% of the market, followed by Novell and others. Even on the desktop, Linux has opened a new battlefront with the launch of Ubuntu in India, which has been quite well received so far.
Still a Unix Country?
Till some years back, India was known as a Unix country. In fact some argue that Linux is a derivative of Unix, but lets leave that for another day. In the Unix space, Sun Microsystems with Solaris leads with a market share of 14%. The company has adopted a two-pronged approach for growth, expanding geographically namely into tier-2 and even tier-3 cities and towns, and tapping new growth verticals. Sun is moving beyond its traditional verticals of BFSI, telecom, and manufacturing into new avenues like Retail, Media, etc. Meanwhile, HP has been aggressively selling the virtualization story through its blade servers resulting in HP Unix accounting for some 9% of the total market.
Another company that has been pretty aggressive in the space is IBM, especially hard selling its high-end pSeries servers. The results are showing with the company showing high double-digit growth and who knows might make a separate appearance on the table next year.
Battle Shifts to Smaller Screen
The battle of dominance has shifted from the big desktop screen to the smaller mobile one. Like in the case of desktop the battle lines are again drawn between the proprietary and open source companies. Thus, Microsoft, Apple, Nokia have made a dash to dominate the small screen, especially the smart phones. Another company that is in complete lead in that segment is Symbian, thanks to the avid support by Nokia.
Even so, companies like Palm, Research In Motion, and Ericsson are also moving vigorously toward their own mobile platform objectives. Last year, even Google joined the fray by forming a Linux-based open source alliance to make inroads into this mobile platform market.
Currently, Windows Mobile continues to lead the scene in India and has more than 35 + models including 20+ touch screen devices like Palm Treo 750, Motorola Q, HTC touch, HTC P3000, i-Mate JAMA 201, ASUS-Lamborghini ZX1 PDA, and others. With newer models arriving almost everyday into the market, it remains to be seen as to how long will Microsoft be able to hold the lead.
In the end, with the PC penetration constantly on the rise, all eyes are on the Indian market space. There have been numerous additions to Captain Ahabs club in India, like Ubuntu and others. But the big question is whether they will able to nail Microsoft, or will the giant continue to dominate, yet again? The coming year will probably give the answer.