Betting on Linux for Business

Lured by promises of increased security, lower costs or simply the chance to align themselves with a company other than Microsoft, many enterprises are turning to Linux systems. More often than not, that means tapping Linux vendor Red Hat, which has come to dominate the market and has made its name synonymous with the open source OS alternative.

“There is a comfort level with Red Hat, particularly with companies that aren’t deeply saturated in technology knowledge,” Gartner vice president George Weiss told the E-Commerce Times. However, he added, “It has a wide lead over its nearest competitor but still faces a lot of challenges to get more profitable and keep growing.”

But choosing Linux still puts an enterprise in a minority, albeit a fast-growing one. In the fourth quarter of 2002, for instance, sales of servers preloaded with Linux software rose 41 percent from the year before, according to IDC. All told, Linux servers represented some US$600 million in sales, compared with $5 billion in outlays for machines running proprietary Unix.

How can companies be sure they are making the right choice?

Changing Views

Mark de Visser, vice president of marketing at Red Hat, told the E-Commerce Times that the perception of Linux has changed dramatically over the past two years.

“Today, we never encounter a CIO who hasn’t already reviewed Linux and come up with a policy or strategy on it,” he said. “We don’t have to spend time explaining the benefits anymore. Everyone is very well educated about Linux.”

That change is due largely to endorsements from the likes of IBM, which has pledged to invest $1 billion to develop Linux for the enterprise. In addition, HP and Oracle seem to be strong Linux supporters. Oracle recently said it would switch its own computer systems from Unix to Linux.

The Linux Profile

Indeed, taking the plunge is becoming easier. Major vendors, from hardware powerhouses Sun and Hewlett-Packard to integrators and technology consultants, have begun to offer Linux-friendly applications, support and integration services.

There is no prototypical company that will adopt Linux over other options, analysts say. Some believe enterprises that are heavily invested in older, proprietary options are far less likely to make the switch than companies that have only dipped their toes in the enterprise-level computing waters.

But de Visser said recently that Red Hat has seen its Linux products adopted quickly in such industries as financial services and government. “We’re extremely well positioned at the core of the Linux movement. We have experience in dealing with the thorniest technology issues. If you look at all the financial firms in New York that have embraced Linux, we’re part of that shift in nine out of every 10 cases.”

Focus on ROI

In other words, Linux is becoming popular in places where the prospect of greater interoperability and security, particularly in the wake of several high-profile computer attacks aimed squarely at Microsoft-loaded machines, can translate into tangible return on investment.

“Linux has made sense for some companies, and I think there are a lot more weighing the best way to use Linux in their shops,” Forrester Research analyst Ted Schadler told the E-Commerce Times. “The key is to have a strategy going in.”

On the Lookout

Schadler said 2003 will be a key year for Linux because the prevailing wisdom has shifted, with more key technology buyers now agreeing that the benefits of open source software outweigh the risks.

That perception has been boosted by high-profile switches, such as Amazon.coms move from Sun’s Solaris to Linux running on HP machines, which the e-tailer has estimated will cut its capital outlay by 25 percent.

And while there are a myriad of Linux vendors from which to choose, Schadler recommends tapping a trusted name, such as Red Hat, or one of the companies in the UnitedLinux consortium, such as SuSE or SCO.

In the end, Schadler and other analysts said, smart CIOs will allow IT departments to play a role in choosing a Linux vendor, as some smaller vendors have gained solid reputations for being easier to integrate and implement. System administrators, along with other IT workers in the trenches, are likely to know the score — and probably will be glad to share their experience with executives.

1 Comment

  • It’s always nice to see good publicity about linux in the trade papers. But the writer should be aware that sales of pre-configured linux boxes are a poor gauge of linux’s penetration. Even Red Hat’s linux distribution is easily and legally available without a transaction. This means that linux machines and systems are much more common than most measurements indicate. I’ve yet to see the dp shop which doesn’t have at least one linux server banging around inside it. It’s often a depreciated-out pc now doing duty as a print or intranet server. In many ways, linux has already taken over, but because no money was involved the pundits cannot see that.

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