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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (99581)	4/21/2000 8:06:00 PM
From: puborectalis	Respond to of 108040

IBM boosts Linux with strategy shift By: Stephen Shankland, CNET News.com 4/21/00 2:28:00 PM Source: News.com IBM will begin selling its Intel-based servers preloaded with a choice of three different versions of Linux, the company and its Linux partners will announce Monday. IBM's Netfinity servers will be sold with Linux operating systems from Caldera Systems, TurboLinux or Red Hat, said Jay Bretzmann, manager of strategy for Netfinity. The move is part of IBM's effort to increase the use of Linux across its already broad server line, an effort that has helped to legitimize Linux. IBM is banking heavily on Linux, using it from its low-end Intel servers on up to its multi-million-dollar S/390 mainframes. Linux is a clone of the Unix operating system collectively developed by Linus Torvalds and hundreds of others. It rapidly won a place alongside Windows NT and Novell Netware as the basic software running on networked computers known as servers, though questions remain about the maturity of processes such as debugging and getting technical support. IBM typically lets computer retailers worry about installing operating systems, but it's altering that strategy because Linux computer buyers tend to be cost-conscious and less in need of hand-holding. Preloading the operating system and selling directly to customers is the method employed by powerhouse Dell and specialist VA Linux Systems. Currently, about 8 percent to 10 percent of IBM's servers ship with Linux, Bretzmann said. That number could increase to as much as 20 percent in the longer term, he predicted. However, because Linux usually is loaded on lower-end servers, it accounts for a smaller fraction of revenues, he said. One of the limiting factors for Linux, Bretzmann added, is that it isn't particularly good at taking advantage of systems with multiple processors--a key requirement for expensive servers that house large databases or handle heavy-duty jobs. right Direct sales with Linux will be more common than with other operating systems, Bretzmann said. "It's a very price-sensitive market." Still, only about 10 percent of the Linux servers will be sold directly. Although there are several different companies that sell Linux, the core parts of the software is identical from one edition to the next. IBM now has deals with three of the four largest sellers of Linux, lacking only SuSE, popular primarily in Europe. IBM has certified 50 software packages for use with Linux and expects that number to increase to 100 by the end of the year, Bretzmann said. Though the operating system remains popular, investors have lost some of their appetite for shares of Linux companies.