The VAR Guy pulled up a chair and participated in the Channel Happy Hour podcast last evening. The discussion -- featuring channel veterans Brett Martin, Gerard Kane and Chuck Lennon -- included a Linux reality check for VARs. Lennon, president of TeamLogic IT, said he still isn't seeing or hearing much about Linux in small business. Here's why.

When it comes to Linux, The VAR Guy can't keep his mouth shut. Our resident blogger has some strong opinions to share. While Red Hat, Novell, Canonical and other Linux distribution providers continue to gain momentum, most of the Linux chatter has very little to do with small business success. Consider the facts:

1. Red Hat has pushed beyond its Linux server heritage to promote JBoss middleware and Red Hat Enterprise Virtualization (RHEV). Mention middleware to a small business, and they're bound to respond with a look of confusion. Plus, RHEV certainly doesn't scream small business.

2. Novell continues to gain some momentum with SUSE Linux Enterprise appliances. But much of the recent Novell BrainShare conference focused on Intelligent Workload Management (IWM), an enterprise-centric strategy aimed to help large and midsize businesses with their virtualization and cloud strategies. VARs won't be pitching IWM to small businesses anytime soon.

3. Two years ago, Canonical had a decent start in the U.S. consumer market -- promoting Ubuntu Linux on a range of netbooks in U.S. retail stores. Fast forward to the present, and Microsoft has largely won back the U.S. consumer netbook market with Windows 7. Partners like Dell continue to offer Ubuntu netbooks, but Dell's most recent fancy involves Ubuntu Enterprise Cloud (UEC) -- which most small businesses have never heard of.

Of course, Red Hat, Novell and Canonical each are making calculated small business moves. But there's nothing in the Linux world -- yet -- that has successfully countered Microsoft Small Business Server and Microsoft's ongoing investment in small business channel partners.

In stark contrast, most of Red Hat's channel partners seem to focus on mid-market and large business opportunities; Novell has been busy rebuilding its channel after years of neglect; and Canonical is just getting started with its partner program. The VAR Guy will provide deeper details when he unveils the second annual Open Source 50 survey results in May 2010. But in the meantime, Microsoft's grip on small business appears firm.

During the Channel Happy Hour podcast, TeamLogic IT President Chuck Lennon essentially confirmed that point. TeamLogic IT is a VAR franchising business, so Lennon has his ear close to the ground in the small business market.

SMB: Silent Linux Successes

Still, Linux has found multiple back doors into the small business market -- without necessarily attracting much attention from small business owners.

Small business network appliances -- everything from routers to switches to security hardware -- often have Linux at the core. Plus, a range of managed services and SaaS applications run atop Linux. (One prime example: N-able's N-central software for MSPs was written on Linux.) And Google Android will surely give Linux a lift in the mobile small business market.

Will small businesses ever ask for Linux by name? For some boutique VARs -- such as The Linux Box -- the answer is yes. But for the vast majority of solutions providers, small business customers still demand Microsoft.

Sign up for The VAR Guy’s Newsletter; Webcasts and Resource Center; and via RSS; Facebook; Identi.ca; Twitter and VARtweet.