E-BUSINESS SPECIAL REPORT
Is Global Linux IBM's Holy Grail?

Although Big Blue maintains a friendly relationship with Microsoft, its efforts in touting Linux worldwide have shown that the company is strolling down the aisle hand-in-hand with the Linux penguin.

Now that the wedding has taken place, IBM is in the honeymoon phase with Linux, taking it on stops from Wall Street to European and Latin American financial centers. The company has much at stake with its open-source initiatives, but it looks as if this marriage is built to last.

Penguin Takes Flight

Although it may seem that Linux has enjoyed a meteoric rise to fame, the open-source operating system has been trying to prove itself since Linus Torvalds first hammered it out in the early 1990s.

During much of that time, it played the role of the little OS that could, and the last few years have seen Linux morph from a geek's toy to an IT manager's tool.

Now that Linux is being used more heavily in the corporate arena, IBM is eager to push the OS to an even higher level of popularity.

John Sarsgard, vice president of worldwide Linux sales at IBM, told the E-Commerce Times that Linux is indicative of the kind of passion needed in the tech arena, and that is why it will succeed.

"Linux is an operating system that reflects intelligence and energy," he said. "Nothing ever takes over the world overnight -- it takes time for people to adopt a new thing -- but we do think Linux is poised for broad, worldwide adoption."

Revving Up

IBM is not the only company investing heavily in Linux' future, but Bill Claybrook, research director at Aberdeen Group, told the E-Commerce Times that it may be the one to beat before too long.

"They're putting more emphasis on Linux than any other vendor, and hopefully that will pay off," he said. "I see nothing to indicate that it won't."

The company's global initiatives have been impressive, with IBM Linux centers opening in New York, Germany, China, Singapore, Korea, Brazil and, most recently, London.

The centers, which focus on drawing customers mainly from the financial sector, allow IBM clients to test and deploy Linux-based hardware and software, and provide consulting services as well.

"We're targeting our efforts extremely broadly in terms of our product lines and service," Sarsgard noted. "It's natural for us to embark on a worldwide effort, since Linux is doing extremely well in many places outside the U.S. right now."

Blue in the Black

Through its centers, IBM can take advantage of strong pro-Linux sentiment in countries like Germany and Brazil to sell products, and it also can make a healthy profit from extensive consulting services.

"The centers will help them tremendously," said Claybrook. "They'll pay off because they'll make a lot in terms of sales and support . Helping people to get going, then being the one to manage the systems for them, should net IBM a lot of money."

The worldwide efforts also might give IBM a reputation as the Linux leader -- something that would pull a great deal of weight in the world community.

As Gartner (NYSE: IT) research director George Weiss told the E-Commerce Times: "Linux is a developing market, and those centers raise the awareness level of the operating system. What you're going to see is deeper and deeper penetration of Linux into the corporate enterprise, and I think that it will be due to IBM, in large part."

Moving Day

Sarsgard is careful to speak only about "proprietary" systems vs. Linux, since IBM still dances with Microsoft, but the timing of IBM's push could be a boon for the company.

Right now, corporate America is trying to decide whether to migrate to Windows Server 2003. One factor to consider is that cost savings gleaned by eschewing Windows licenses could be sizeable enough to convince a company to switch systems.

When Dave Pekol, IS administrator at All-American Moving Group (the largest agency under the Mayflower banner), was deciding whether to go with Windows or Linux, licensing cost was certainly a factor.

"Microsoft licensing is expensive," he told the E-Commerce Times. "For example, we have licenses for Microsoft Office here that cost about (US)$10,000 per year. With Linux, you have an annual maintenance charge, but it's not nearly as expensive as Microsoft."

Risk Averse

Every endeavor has its risks, of course, and IBM's Linux push is no exception. However, unlike betting on an unknown operating system and trying hard to sell it, IBM seems to face only minor rough patches in its marriage with the penguin.

"We do have inhibitors, like incumbency on the part of other operating systems, and also, the economy is not so great," Sarsgard said.

However, when the current economic downturn swings in a happier direction, enterprises can expect IBM to be even more aggressive in getting the penguin into their IT and IS departments.

"When the economy begins to tick up," Sarsgard said, "Linux will rapidly become first choice for many companies."