Eric Lai wrote an excellent article for Computerworld. In this article he talks about what Linux is doing wrong on the desktop.
In the article some of the obstacles are:
1. Corporate IT perception that proponents of the Linux OS are troublemakers.
2. Large PC Vendors don't want to give up their profit installing Windows.
"Large PC vendors actually turn a profit installing Windows because of all the money they are awarded by Microsoft from its marketing slush fund. Microsoft provides plenty of other soft incentives to hardware vendors, from sales support on large accounts, engineering assistance and essential support for making drivers for add-on peripherals work properly. It's like crack, they just can't get away from it".
3. PC makers fundamentally dislike Linux because it doesn't sport a track record of encouraging users to upgrade their computers in regular three-year cycles the way Windows does.
4. There is the mistaken belief among Linux advocates that there's an adequate number of open-source equivalents to popular commercial Windows-based applications and games. Mainstream users just aren't going to voluntarily switch to Linux if it means they have to give up Photoshop, Quicken or even Microsoft Office. Does OpenOffice meet my needs? Almost. Does GIMP [ an open-source photo editor] meet my needs? Same answer. And drivers are still a real drag".
According to this article, "Linux's best prospects, he said, are not on PCs, but with cell phones or newfangled consumer electronics appliances, such as the Linux-based Tivo."
"You can't out-resource Microsoft or out-compete them. You need to find out where the market is going. As [Netscape founder] Jim Barksdale says, 'Find a parade, and get in front of it.'"
My personal belief is that Linux isn't quite ready for the corporate world. At least just yet. With the release of SUSE Linux Enterprise Desktop (SLED) 10 it could be profitable for small businesses and I believe SUSE is definately ready for the home market. Linux is almost there. However with Microsoft Vista looming around the corner there are decisions to be made and companies should take another look at Linux as a viable alternative to Microsoft. It could be worth it to save money on hardware upgrades and expensive OS costs. I found my parade and it's marching with SUSE Linux!