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At the end of the 1990s, Linux looked like it could challenge Microsoft Windows as an alternative for everyday PC users. Linux has come a long way since then. And Microsoft scored an own goal with the confusing, incomplete and often annoying Windows Vista.

Yet desktop Linux failed to break out beyond a hard-core following of geeky devotees. Windows now faces bigger threats than Linux.

Meanwhile, Linux struggles to gain traction.

When desktop Linux was news

A decade ago I wrote for Australian Linux Today. At its peak, my posts would be read by tens of thousands and attract hundreds of comments. Being slashdotted was addictive.

Apart from the odd loon, most discussion was informed and intelligent. Internet.com couldn’t make Linux Today pay, at least not in Australia. The parent Linux Today site lives on under the Jupitermedia banner.

The problem with a free operating system

The demise of the Australian Linux Today site was part of the broader problem with Linux and its inability to reach a wider audience. We had bankable traffic, but nobody in the Linux business bought advertising.

That’s because nobody in the Linux business has a marketing budget. That’s because hardly anyone in the Linux business makes money. Which in turn is down to the fact that Linux is given away.

This meant there was no profit to support the kind of thriving media community that follows Microsoft Windows.

There’s not much today either. More to the point, there’s not even the money to fund the kind of activity that underpins planet Google, mobile computing and the world of Web 2.0 websites-cum-services-cum-applications that now threaten to outflank Windows.

Irony of desktop Linux economics

Ironically, Linux or something similar, underpins most Microsoft challengers. And Vista’s annoyances aside the threat of desktop Linux and open source did much to prod Microsoft into improving its act. Today the company and its products are massively improved.

Today’s Linux distributions are excellent. There’s not much in Vista that the latest version of Ubuntu, 8.10 fails to offer. Kubuntu is possibly better. Fedora is less consumer-friendly, nevertheless a plausible option.

Companies and people freely give their own time and energy to open source projects. That’s great. Long may that continue.

Linux users work at the frontier and continue to pioneer new ideas and technologies that will permeate into the mainstream. But I can’t see Linux ever climbing out of its geeky gravity well and being mainstream. That day has passed.

Linux may find its way under the bonnet (hood if you’re American) of mainstream technologies, it will never be the face of day-to-day computing.

Open source software is free.

Anyone can download an open source program. You can run it, copy it and pass it on to friends and colleagues. You can look at the code and see how the developers made the program. None of this means paying a license fee. It doesn’t break any laws. You have permission to do all these things.

Money, or cost, is not the most important point. Advocates think of word free as in ‘free speech’, not ‘no payment’.

Freedom means that users can change the programs to suit their own needs. That would be illegal with most other forms of software.

Open Source freedom means responsibility

There is one restriction: you must, in turn, pass the same set of freedoms on to everyone else. Altered open source programs must be made available to everyone.

This approach decentralises control. In turn, that means developers continually improve the software.

At the same time, having large numbers of people looking at and improving on programs means that bugs are quickly eliminated. That improves quality control.

A lot of important programs and applications are based on free software. It runs the internet and underpins some of the most popular operating systems.

Mark Neely asks Is ‘Born Global’ the new normal for software start-ups?

Anyone who has played the board game Risk knows the smartest strategy is capture Australasia before setting out to conquer the world. Risk may have been a powerful metaphor in the past but it doesn’t apply to business in the digital age.

When the product you’re exporting weighs nothing and can travel to its destination at the speed of light, geographic barriers are meaningless.

New Zealand tech companies learnt this early. They latched on the Born Global idea earlier than their Australian counterparts. That’s partly because they are further out on the fringe of the global economy. But they were treading down a tried and tested path.

Global only  option for New Zealand start-ups

Unlike Australian firms, New Zealand companies had little choice. The local market is tiny and poor by OECD standards.

Almost every successful NZ business of the last 20 years has exported from day one. The list includes children’s clothes, fashion, biotechnology and booze as well as software and online services.

Most of the economic factors Mark mentions in his post (market size, ex-pat community etc) apply in spades to New Zealand. Here, exports are about 30 percent of GDP. In Australia exports are roughly 20 percent of GDP.

Incidentally, both figures are depressingly low by OECD standards where the average is almost 50 percent of GDP.

Tiny economy, aware of global issues

New Zealand is a tiny economy, but everyone working in it is painfully aware of its relative international insignificance. I’d argue Australian businesses are misled by their seemingly large and buoyant economy and are more complacent about exporting. That Risk strategy looks smarter in Sydney than Timaru.

One significant difference is NZ start-ups don’t tap into overseas investment as much as Australian firms – if this impression is wrong please let me know. Instead our entrepreneurs opt to cash out of their businesses at an earlier stage – in many cases when their business and products are still immature.

I’m not a finance expert, but this tells me New Zealand companies suffer from poor access to venture capital – or if they have access to VC funds, they don’t have access to the right kind of venture capital.