Turbolinux looks to western China for more customers

IDG News Service - Faced with growing competition from U.S.-based Linux vendors, Turbolinux China Software Co. is looking to China's western provinces for new customers, according to a senior company executive.

"We are facing fierce competition from Novell [Inc.] and Red Hat [Inc.], so we want to differentiate ourselves," said Claude Zhou, Turbolinux China's general manager, in Beijing. "We want to do something in the second-tier cities."

Novell and Red Hat have more resources and can draw on a wider array of multinational partners than their rivals in China, including Turbolinux, Zhou said. But both Novell and Red Hat are primarily focused on China's major cities, such as Beijing and Shanghai, creating an opportunity for Turbolinux China to concentrate on customers in China's smaller cities and provinces like Sichuan, in southwestern China, Zhou said.

This strategy has yielded results for Turbolinux, which has recently sold its Turbolinux HA high-availability server clustering software to several customers in Sichuan, including the state-run healthcare provider Sichuan Province Health Agency, and the local units of telecommunication providers China Mobile Communication Corp. and China Network Communications Group Corp.

Turbolinux HA was developed partly using $124,000 in development grants from the Beijing government and China's Ministry of Science and Technology, Zhou said.

Another way that Turbolinux China is adapting to face growing competition in China's Linux market is to shift its focus from only providing the Linux operating system to offering a "complete stack" of open-source software, Zhou said. In the future, Turbolinux China will derive the majority of its revenue from open-source applications rather than the Linux operating system, he said.

Looking ahead, Zhou expects to see a shakeout in China's Linux industry as there are currently more companies competing than the Chinese market can support. "This market can support just two or three players and now there are five to six players," he said.

"It's deadly competition," he said.

Reprinted with permission from

IDG.net
Story copyright 2009 International Data Group. All rights reserved.