TO ALL LINUX DOUBTERS - "Linux gains corporate respectability"
By William M. Bulkeley
WSJ Interactive Edition
April 9, 2001 4:41 AM PT
Has the Linux operating system, born in the computing underground, finally traded in its Birkenstocks for a pair of wing tips?
Linux, the free operating system developed by Finland's Linus Torvalds, was organically grown by thousands of programmers around the globe and once seemed out of place in the orderly world of corporate computing. But a maturing Linux is starting to be used by major companies to run key businesses. Royal Dutch/Shell Group and Amerada Hess Corp. are using Linux-based supercomputers to sift through seismic data, hunting for undersea oil. Home Depot Inc. is starting to roll out Linux-based kiosks and point-of-sale systems in a project that will involve installing 90,000 terminals at all of its home-improvement stores.
All operating systems function as a computer's chief program--the software that runs every other program--but differ in other respects. Linux is a variant of the popular Unix operating system. Unlike other company-owned Unix variants such as Sun Microsystems Inc.'s Solaris, Linux is enhanced and backed by programmers all over the world who disclose the code they develop to each other by e-mail. Periodically, Torvalds evaluates the new developments and designates the best as part of the Linux "kernel" for a new distribution. In January, Linux 2.4 was unveiled.
Linux garnered a 27 percent share of operating-system software for computer servers sold last year, up from 24 percent in 1999 and 17 percent in 1998, according to market-researcher International Data Corp. Linux is one of only two major operating systems gaining market share. The other, industry leader Microsoft Corp.'s Windows 2000 operating system, captured a 41 percent share last year, up from 38 percent in 1999.
In another indication of Linux's mainstream acceptance, an IDC survey found 20 percent of corporations were using Linux to operate some of their databases last year, and 10% were using it as part of human-resources and customer relationship-management systems. Those percentages are double the year-ago levels. "Critics and nonbelievers can no longer dismiss the Linux market as a fad," says Al Gillen, research manager for IDC.
Linux still hasn't made headway on corporate desktops, a market so dominated by Microsoft that inroads by an interloper are likely to be limited for a long time. Nor has the Linux business yet proved profitable for Linux specialists Red Hat Inc., Durham, N.C., or VA Linux Systems Inc., Fremont, Calif., whose stocks have cratered following spectacular initial public offerings in 1999.
But the price of a free--or nearly free--operating system certainly has its appeal, especially as efforts to cut information-technology spending spread in the slowing economy. A compact disc containing the Linux code from Red Hat costs just $29.95, and can be used throughout a company for no extra charge. By contrast, licensing Microsoft's Windows system or Sun's Solaris would cost hundreds of thousands of dollars for an entire company.
Corporate programmers also love Linux because they are free to change it for their own purposes. Commercial operating systems are owned by their developer and can't be tweaked by customers.
Adding momentum, International Business Machines Corp. last year endorsed Linux and promised to spend $1.3 billion supporting the product. Although IBM isn't selling Linux, it makes money from the software by selling more of its own hardware, software and services. More than 20 percent of the Intel Corp.-based servers IBM sold in last year's fourth quarter were running Linux, IBM says.
Analysts believe IBM is championing Linux, in part, because it sees the system as a potential weapon against Sun and Microsoft. But Samuel J. Palmisano, IBM's president, says Big Blue is endorsing Linux because major customers, especially overseas, are asking for it. "Customers are beyond tire-kicking," he says. This "will be the year that Linux grows up in the enterprise."
IBM's support helped persuade Shell scientists to consider Linux when Shell decided to upgrade a new generation of computers for its seismic-analysis work. "It's really a serious operating system," says Jack Buur, principal research physicist for Shell in Rijswijk, the Netherlands.
Using Linux isn't painless. Compared with Windows and other Unix systems, there are far fewer application packages on the market, and companies often have to hire programmers to develop special software. Although growing numbers of Linux programmers are coming out of colleges, many corporate information-technology staffers are unfamiliar with it.
Then there is image. At this winter's LinuxWorld trade show in New York, youthful programmers with blue hair, earrings and backward baseball caps clearly outnumbered businesspeople with suits and ties--and this puts off some corporations. "Most CIOs will tell you they don't want any barefoot, navel-pierced hippies messing around with their databases," says Frank Ingari, chairman of Wheelhouse Inc., a Burlington, Mass., marketing-software consulting firm.
Reflecting corporate ambivalence, Linux has gained a foothold in many companies as a quick solution introduced by a worker, then spread more broadly as its advantages became clear. One example is the Peoria, Ill., factory of Japanese construction-equipment maker Komatsu Ltd., where Jose L. Santiago, a senior system analyst, started using open-source software to run the company's Web site. Now, much of the factory's vital information runs on Linux, including files of computerized product designs.
Companies using Linux for database applications are diverse. California Pizza Kitchen Inc., a restaurant chain based in Los Angeles, uses a database running on Linux to manage its real-estate acquisition and development functions. Nordisk Inc., a Los Angeles-based unit of Norwegian industrial giant Norsk Hydro ASA, that makes and repairs air-freight containers, last year started using a database program running on Linux to track the status of damaged and repaired cargo containers from Paris to the Philippines.
Linux is also making inroads in retail chains, some of which are adopting it to help run their cash registers. Burlington Coat Factory Warehouse Corp. and Best Buy Co.'s Musicland, owner of the Sam Goody chain, have started to make the switch. As for Home Depot, it is using Linux as it rolls out thousands of new point-of-sale systems to replace those based on Microsoft operating systems. Using Linux on a network avoids having to pay Microsoft license fees for every terminal, says Mike Anderson, vice president of information systems at Home Depot. |
