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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?


To: Dave who wrote (66516)3/29/2002 2:48:55 AM
From: Joseph Pareti  Read Replies (1) | Respond to of 74651
 
DOES OPEN SOURCE SOFTWARE REALLY WORK? 03.29.02
FEATURES AND COMMENTARY HPCwire
==============================================================================

Lisa Gill reported: In the ongoing debate between open source advocates and
proprietary software makers and users, it turns out that -- to at least some
extent -- both sides are right: Open source does work, but only in some cases.

With respect to enterprise computing, analysts agree that for smaller projects
that do not involve mission-critical elements, there is room for open source
software, such as Linux.

And major hardware commitments from at least one server manufacturer indicate
that Linux could be used for virtually all server operations in the near
future.

But experts point to a continuing lack of service and support for Linux, as
well as too few enterprise applications, as factors that have hampered its
ability to mature into a full-fledged, scalable server operating system. On
the other hand, there are signs of change in both of these areas.

Linux for the desktop is another matter. Its wide-scale adoption is still
treated with skepticism by experts, who say that for consumer-level users,
simply configuring Linux to dial into an ISP (Internet service provider) is a
challenge.

Combine that apparent complexity with a relative lack of basic applications,
and analysts do not see Linux as a serious desktop challenger to either
Microsoft's Windows XP or Apple's OS X for the foreseeable future.

Right Time, Place for Linux

Mid-sized companies have led the pack in terms of Linux adoption, according to
a recent Yankee Group study, employing the operating system in smaller, less
mission-critical projects.

Eleven percent of all companies surveyed by the Yankee Group said they use
Linux in some form, 69 percent said they employ Windows, and the remaining
respondents are almost evenly divided between Sun's Solaris and other forms of
UNIX.

Yankee Group research director Neal Goldman told NewsFactor that except for
embedded, black-box Linux implementations -- which let programmers more easily
control the environment in which open source software runs -- enterprise use
presently is restricted to limited-scale projects.

"It's generally a small-scale implementation -- local, few numbers of servers.
The more mission critical it is, the more you're going to worry about your
system going down, and the less you want to be solely responsible for that,"
Goldman said.

Goldman pointed to the free aspect of such software as another incentive for
companies for which licensing fees pose a budget challenge.

Bill Claybrook, Linux and open source software research director at the
Aberdeen Group, told NewsFactor that the gauge of how widely accepted Linux is
among companies is how often it is used as a back-end database host -- much as
UNIX was used years ago.

"Right now, Linux only scales up to four-way machines. Within the next year,
you'll see it scaling on eight-way machines. Then I think you'll see it take
off a little bit," Claybrook said.

If Linux scalability were to increase, Claybrook said he believes it would
become appropriate for much larger projects and would be more widely adopted.

Hardware Commitment

Sheila Harnett, an engineer at IBM's Linux Tech Center, told NewsFactor she
agrees that the scalability issue is the main factor holding Linux back. She
said she expects that within the next 12 to 18 months, Linux will be able to
expand to eight- or even 16-way configurations.

With a push earlier this year by IBM -- the company introduced its zSeries
Linux-only mainframe servers, which can consolidate 20 to several hundred
smaller servers -- the tide may be turning in open source's favor for
large-scale implementations.

"The thing that really appeals to customers deploying Linux on the zSeries,"
said Harnett, "is the fact that they can create a bunch of virtual servers as
if they're running in their own box. They're insulated from one another."

As to whether such an investment in Linux is meant to replace or offset
Microsoft's Windows operating system, Harnett explained that companies are
free to choose between licensed proprietary software and open source.

"A lot of customers find value in the fact Linux is open, it's portable, and
[it] doesn't tie them into a single platform," he said. "That's part of the
strength IBM sees in it. It's open, and there are thousands of developers --
250 of them work in my group."

Push for Applications

But what hampers Linux the most, according to analysts, is a lack of
applications that can run on the open source operating system.

The Yankee Group's Goldman noted that management tools, such as software
deployment and monitoring functions, are less readily available for Linux than
for other enterprise-strength operating systems.

"[Linux] just doesn't easily plug into the management framework," Goldman
said. "The applications aren't standardized. When that level of
standardization occurs in terms of applications and management tools, then I
think Linux will get there.

"For now, it's great when you want to tinker," he noted.

In addition to management tools, Aberdeen Group's Claybrook pointed to a lack
of general business applications as something that has kept Linux from fully
maturing.

Claybrook noted that SAP and Oracle have been available for Linux for at least
a year. But he added that critical software, such as CRM systems, must be
ported to Linux before the operating system can become more widely accepted.

Support, Service Debatable

In addition to compatible software, another hot button is service availability
for open source applications.

"There are different reasons why people advocate open source. One reason for
enterprise is, 'You have the source code; if it doesn't work, you can fix it.'
But the fact is, if I'm an enterprise, I don't want to fix it. I want somebody
else to fix it," Goldman said.

"Who are you going to call when it doesn't work?" he asked.

On the other hand, Aberdeen's Claybrook said he does not see service as the
main issue for enterprises, especially because most major computer makers now
support open source software.

"The system vendors -- IBM, HP, Compaq, Dell -- who sell Linux all support it.
They resolve Level One and Level Two problems. If problems come up that they
can't solve for the customer, they turn to Red Hat," Claybrook explained.

IBM's Harnett agreed. Three years ago, he said, lack of service availability
was the most common complaint among customers. Currently, however, every major
Linux vendor and distributor offers full-scale service.

Desktop Dwindles

But when it comes to Linux on the desktop, experts' tone is less upbeat.

"Linux on the desktop is toast," said Goldman.

"Pathetic," Claybrook noted.

"All the system vendors are pushing Linux on the server side, [but] there's
really no large company that is ... pushing Linux on the desktop," Claybrook
said.

But Claybrook added that he hopes the release of Sun's StarOffice 6.0 -- which
is compatible with Windows, UNIX and Linux -- will make the operating system
more attractive to the average desktop user.

"I believe that if you supported the desktop side more and there were more
Linux desktop users, you'd sell more servers," he said.



To: Dave who wrote (66516)3/29/2002 3:01:34 AM
From: Joseph Pareti  Read Replies (1) | Respond to of 74651
 
ANALYST: COMBINED HP-COMPAQ SHOULD ALLY WITH MICROSOFT 03.29.02
FEATURES AND COMMENTARY HPCwire
==============================================================================

Robyn Weisman reported: With general agreement that the merger between
Hewlett-Packard and Compaq Computer may well have been approved in the recent
proxy vote, analysts are now questioning the market position of the combined
entity.

In particular, they are asking how -- or whether -- the new company can
reverse the declining revenue streams of some of its brands.

Neal Goldman, director of Internet competitive strategies at research firm the
Yankee Group, told NewsFactor that while HP, in particular, offers good and
often innovative products, neither company has proven its ability to lead in a
market.

With respect to specific sectors, Goldman mentioned Dell in the PC business,
Sun Microsystems and IBM in the hardware business, and IBM in the IT services
arena as leaders.

None of HP's or Compaq's offerings is as strong as products made by their
direct competitors, Goldman said, adding, "A bunch of weak pieces do not a
strong foundation make."

Fighting the Wrong Battle

Focusing on the server space, Goldman contended that HP-Compaq is fighting a
hardware war while competitors IBM and Sun are fighting -- and winning -- a
software war.

"In the server market," Goldman said, "both Sun and IBM know that software
drives hardware, and that the piece of software they create for developers and
for the infrastructure is key" to selling their hardware.

He called the marketing and selling of a given software platform evangelical
in nature.

"You could call it dogmatic in a way," he noted.

Battling Microsoft

According to Goldman, the marketing methodologies of both Sun and IBM are
framed as an old-fashioned battle between good and evil.

Sun frames the battle between its Solaris enterprise software and Microsoft's
.NET in terms of "Java the Good" versus the Evil Empire. IBM takes the battle
one step further with Linux, pointing out that while Solaris is proprietary,
open standards darling Linux is the only true freedom fighter.

In contrast, both HP and Compaq serve up hardware that will run on any
Intel-based enterprise platform. This tactic, while perhaps accommodating,
does not inspire people to switch to their brand of hardware.

The Need To Evangelize

Goldman said that neither HP nor Compaq is an evangelizing company, though he
added that the combined entity must figure out how to do so to remain in the
game.

"They have done nothing to ensure that top-line revenue would continue to
grow, and there's no reason to assume that two companies with declining
revenue streams would stream up" due to sheer size, Goldman said.

What HP-Compaq needs to do is team up with a huge evangelist to help it sell
its servers, Goldman explained. And that company can only be the biggest
evangelist of all: Microsoft.

Joining the Dark Force

Microsoft currently lacks a firm alliance with any hardware vendor to sell its
.NET products and services. Both Goldman and his Yankee Group colleague Rob
Perry argued in a research note released early this year that "HP and Compaq
[need to] merge and tighten their relationship with Microsoft, dumping J2EE
[Java 2 Enterprise Edition Platform] middleware products.

"Compaq convinces HP that Bluestone is a black hole, and that to win in the
market it must pick a side. The combined company uses Compaq's strong
Microsoft relationship to become the primary server platform for .NET and
Biztalk," the analysts wrote.

While Goldman said such a scenario may be unlikely, a merged HP-Compaq joining
forces with Microsoft would push the server and services markets into three
distinct camps: Sun-Java, IBM-Linux, and the high-tech Darth Vader,
HP-Compaq-.NET.

According to Goldman, "HP-Compaq can offer Microsoft that honking big hardware
it needs for [both companies] to win."