RedHat: An explanation: as a public, for-profit company, Red Hat must create products and technologies with an eye on the bottom line, and with desktops this is much harder to do than with servers. The desktop market suffers from having one dominant vendor, and some people still perceive that todays Linux desktops simply dont provide a practical alternative. Of course, a growing number of technically savvy users and companies have discovered that todays Linux desktop is indeed a practical alternative. Nevertheless, building a sustainable business around the Linux desktop is tough, and history is littered with example efforts that have either failed outright, are stalled or are run as charities.
Larry Augustin: On the positive side, Open Source has made incredible progress into all parts of software. Not only are there now open source alternatives for virtually every part of the enterprise software stack, but those layers are widely adopted and have significant (sometimes even dominant) market share. If 10 years ago you had predicted that open source would be competitive in ERP, CRM, Business Intelligence, Messaging, etc. I don't think anyone would have believed you. Open source has grown from a concept understood mostly by the hacker community into a well understood and accepted way of building enterprise software. If you step back and compare then to now the industry truly has been transformed.
On the downside, I'm disappointed by the lack of progress in consumer software. The acceptance of open source in the consumer market still lags. Probably more troublesome is that I don't think anyone really understands yet how to change that.