The Seven-Year Niche

Anyone paying even the slightest attention to the fortunes of Linux, the "free" computer-operating system beloved by techies and intriguing to CFOs, has probably noticed that a new buzz phrase has entered the conversation. "Open source" has become a staple of computer-vendor press releases and technology-conference agendas, providing an umbrella term for Linux and a growing volume of non-Linux software that is now in the public domain and ready to be stitched into the fabric of computing infrastructures.

In the past year, vendors of many stripes have offered up once-proprietary software as eagerly as patrons once stood in line at Studio 54. Software dubbed "open source" is free to use, alter, and share, with no license fees per se, although if it is obtained via a for-profit company, support costs will likely enter in. Work continues apace on a variety of open-source efforts nearly as well known as Linux, such as the Apache Web server, the MySQL database, and the OpenOffice desktop suite. And Linux itself, still the linchpin of this movement, continues to carve an ever-widening space in Corporate America, to the point where Dan Kusnetzky, vice president, system software, at research firm IDC, acknowledges, "We published a projection in 1997 that Linux would show up as a mainstream [operating system] choice in all vertical markets around the world by the end of 2005. Our projection may have been too pessimistic. Seven years later, it's happened."

According to figures compiled by IDC, 3.4 million Linux client operating systems were shipped in 2002, and that number is forecast to grow to more than 10 million by 2007. Gartner says shipments of Linux-based servers increased about 61.6 percent in the second quarter of this year compared with the same period last year. Those figures don't include the substantial volume of free downloads that often give Linux its initial presence in corporate environments.

More important than increased sales figures may be a growing perception that the time is right for Linux to move beyond pilot projects and relatively safe duty as the underlying software for fairly mundane tasks such as print and file services, and on to center stage as a key platform for a range of business needs.

"We evaluated Linux in 1999 and didn't feel it was ready for prime time," says Mike Jones, senior vice president and CIO at retailer Circuit City Stores in Richmond, Virginia. "It has come a long way since then, and our confidence has increased." So much so, in fact, that Circuit City has launched a project to roll out Linux-based point-of-sale systems from IBM at its 600 nationwide retail outlets beginning in March. The strategy is part of a "revitalization effort" that will move its stores from customized, proprietary systems to software based on open standards, says Jones.

The growing popularity of Linux and other open-source software has grabbed the attention of leading IT vendors, which want to create open-source user communities that will help boost their revenues (or reduce their costs) by linking their commercial products and services to systems designed, at least in part, with open-source technologies. More than 70 percent of open-source development today is supported by vendors that offer commercial products that incorporate open-source software, in contrast to most people's perception of a strictly grassroots movement, staffed on a part-time or best-effort basis, as open source was 5 to 10 years ago, says Bill Weinberg, architecture specialist at Open Source Development Labs, a Beaverton, Oregon, industry group that's working to create open-source options for business. The OSDL also pays the salaries of key open- source developers, in particular Linus Torvalds and Andrew Morton.

Vendors on the Bandwagon
IBM, which garnered more than $2 billion in Linux-related revenue last year and is now putting Linux at the heart of many of its enterprise products, has made a slew of open-source announcements this year. In August the company expanded its Leaders for Linux program, which provides resources such as presales support, education, and technical support to partners — including recently signed Novell and Red Hat — that market and support Linux products on IBM platforms. At the same time, IBM announced that it is contributing more than half a million lines of relational database code to the Apache Software Foundation. IBM participates in and contributes to more than 150 open-source projects, including Linux, the Globus Alliance, Eclipse, and Apache, and has issued enough press releases on the subject to fill an enterprise-class database.

Not to be outdone, Hewlett-Packard, which had $2.5 billion in Linux-related revenue last year, has been introducing Linux options for select systems and says it now ships 100,000 desktop and notebook computers equipped with Linux each quarter. Earlier this year, it announced an agreement with Novell to certify and support the Novell SUSE Linux operating system on select HP Compaq client systems. In June HP signed agreements with MySQL and JBoss to certify, support, and jointly sell their open-source products on HP servers. The company also said it has expanded its Linux professional services team to 6,500 people.

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