Until now, the Linux PC has been more of a theory than a fact. Now it’s a fact, and it may soon become a very inconvenient fact for Microsoft. For Linux PCs to establish themselves as viable home or small business products, several things needed to happen:

1. Linux PCs needed to equal the ease of use of a typical Windows PC.

That’s a tough mountain to climb, since most PC users think “ease of use” means “working the way Windows works”. Linux PCs don’t exactly do that. Luckily for the Penguin, three things happened:

• There was a Mac resurgence and Apple’s OS X gradually demonstrated that “ease of use” is actually “ease of use”.
• The Linux interface eliminated the “geek element” in some of its distributions.
• Microsoft radically changed the Windows interface with Vista in a way that alienated some of its customer base.

The upshot is that the Linux PC is now consumer friendly, by any reasonable definition.

2. The Linux PC needed to differentiate and innovate

You could argue that the Linux PC always was different, as it came loaded with a full portfolio of free software products; office software, the browser, graphics, video etc. If you were a discerning computer user the value was obvious. The problem was that Linux PCs were perceived in the way that cheap Eastern European cars were once perceived, as “substandard”.

It meant that a number of Linux PCS would indeed ship, but it didn’t generate consumer interest. Nicholas Negraponte’s OLPC broke through this barrier, because it was so innovative. It demonstrated that genuine PC innovation was entirely possible using Linux and Open Source as the foundation. Even if the OLPC does not prove to be as successful as many had hoped, it changed perceptions irreversibly. It is no surprise that in its wake we now see other innovative Linux based offerings.

3. Linux PCs needed committed vendors.

It simply wasn’t enough for PC vendors “to offer to load Linux if you want it”. The implication was that “if you take such a bizarre choice, that’s fine, but you sail at your own salvation” Some vendors had to step forward, who would properly productize a Linux PC.

The first vendor to do so was Everex with its gPC, available from Wal-Mart for $199. Everex demonstrated that a Linux PC market existed. Microsoft had sustained its monopoly by using any tactics it could to ensure that alternatives to the Windows PC would not become a viable business, but it couldn’t stop Wal-Mart from cutting prices or Everex from supplying. It was alll outside of Microsoft’s channels – just as the Apple stores were outside Microsoft’s channels.

Everex also recently came out with the CloudBook, a $400 laptop with a 7-inch screen. Almost at the same time, Taiwan’s Asustek launched its Eee PC, a small and seriously inexpensive laptop also with a small 7-inch screen – for $299. The Eee PC has a Wi-Fi chip and a web cam and the usual set of open source software loaded, plus Skype. Currently the Eee PC is hard to get hold of, because it’s selling like hot cakes. Asustek expects to sell 5 million by 2009. Then, at the recent Consumer Electronics Show in Las Vegas, Shuttle launched its $199 KPC Linux PC. It is also promising a cut-down version of the KPC for $99.

4. The Linux PC needed to become a category

What is happening here (as described above) is the forming of a new PC category. As it grows, the major PC vendors, HP, Dell, Lenovo et al, will have to join the party. The current price of Windows (over $300 for the Ultimate version) is higher than the price for the whole PC in most of these examples. If you throw in the Microsoft Office products then the Microsoft option suddenly looks as though it has an unsustainable premium.

Add this to the fact that the Linux PC vendors are targeting a global market and it’s easy to imagine significant growth and the inevitable forming of a commercial ecosystem around this.