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Failed versus failed so far
No one would disagree with the statement, "To date, distributions of Linux with graphical user interfaces on top like KDE and GNOME have failed to gain traction in the workplace or at home, with an estimated XX thousand users regularly employing this combination, according to Random Research Firm With Numbers. Although the companies selling Linux as a shrinkwrapped box offer a GUI, they report their customers tend to be an ever-broader swath of system administrators and sophisticated small workgroup users who are mostly employing the combination of free preconfigured server software and proprietary-but-open server administration tools that Red Hat, SuSE, and other companies provide."
I don't have the numbers for the former or the quotes for the latter, but based on the general statistics in the field, it's clear to say that if inroads for end-user GUI Linux *were* a goal, then that goal has, to date, failed.
Markoff's statement that it failed makes it sound like there's no future. As many have noted, Microsoft's new licensing program is pushing traditional default Microsoft licensers into the Linux world, with GUIs and programs like AbiWord a big part of that.
Meanwhile, as you point out Doc, and Tim O'Reilly in his recent writings about taking a trip to Microsoft's Mac Business Unit, Mac is where it's at, and it's so where it's at that people forget that Aqua is running on top of BSD and that BSD is just running underneath Aqua.
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