Open Terrain and Moving Into Defensible Niches

Our trainer Allan Elder asks the following:
I am fan of the Linux operating system, one of the few competitors to Microsoft. It would interesting to know what Sun Tzu would do if he were made a General at RedHat (leading competitor offering Linux) or any other vendor in the war on Microsoft. Where might he begin? What would be the most powerful opening moves?
Linux today is almost a textbook example of building on existing position. When I started my software company around 1990, we built everything on UNIX, because our stuff was based on servers. Back then, even Microsoft was in the UNIX game for servers, with their own version called, XENIX. The "RedHat" of the era, was a company called SCO, (Santa Cruz Operating System), which sold its version of UNIX, SCO UNIX for Intel-based systems, but the main strength of UNIX was that it was offered by all the server hardware makers, which each offered their own version. The nice thing for software developers was the the differences were minor, so companies like ours could move our software to whatever were the popular servers of the moment, SUN, IBM, HP, and so on. Linux and RedHat built their position on top of that server techology, taking advantage of the growth of the Internet and its creation of more and more demand for servers. Most people, whether they know it are not, are running their servers on Apache server technology, which is built on Linux. However, by definitiion, any UNIX operating system and its current most popular current incarnation, Linux, are "open" terrain. Open terrain is easy to move into and hard to defend. This makes it very difficult to make a profitable claim in these areas. For this reason, a whole series of UNIX/Linux operating systems vendors have come and gone over the years. Since they cannot "own" their product, they can only own their brand identity, but a brand identify without a unique advantage to your brand is just a name on a box. Most of you have probably never heard of SCO Unix, which was once dominant "brand" in this market. The problem is that once you try to "specialize" your brand by adding value to it, it loses the openness that is the main source of appeal. SUN discovered this when it tried to develop and market their Solaris Unix product. The more "features" they added, the more difficult it was for developers to take advantage of those features and still keep their product compatible with the broad market of open features. Linux is generic and RedHat Linux can survive as long as it spends all its resources on marketing and packaging. However, it is hard to resist the desire to expand your brand in other theoretically, more profitable ways, specifically into Microsoft territory. When competing against a much larger competitor, the most important rule is that you don't attack their stronghold. Linux has been successful thus far largely because it hasn't wasted a lot of resources pursuing the desktop in competition to Microsoft. However, that tempation is very hard to resist over time. My favoriite Linux company is not like RedHat, which, positioned as an operating system company, can easily fall into the trap of trying to move into Microsoft territory. Instead, I like companies such Tivo, (you didn't know that Tivo was Linux?) that create a powerful proprietary position on top of Linux. TIVO's position is not ideal, having positioned themselves in a classical "disputed" territory, which seems so rich that everyone, including Microsoft, wants a piece of it, but their success comes down to defending their unique position and brand identity, which is always easier than trying to fight for someone else's position. Much of the future of computing is going to be built around special function computers as opposed to generic desktops. Most companies (for example, in cell phones, video games, etc. ) are still reinventing the operating system wheel rather than leverage the power of a well tested system such Linux as a foundation. The Microsoft "advantage" in moving into these areas is that they build everything on top of their existing operating system. Linux (or other UNIX, since Linux is Intel based) can be used to level the playing field in the new areas of application that are going to open up over the years. UPDATE: The new Microsoft "Surface" is the type of dedicated device that will be the future of computing. The specific purpose of the Surface is to allow collabrative display. In the future, more devices will be built for similarly specific input/output functions. The only ways to build such devices are either to own an operating system as Microsoft does, build a new operating system, or, most economically, use Linus as its core. wider output and broader input