Print this article | Return to Article | Return to CFO.com
Yes, it's replacing Unix, and it continues to inspire passion. But is the tipping point always a day away?
Russ Banham, CFO IT
November 17, 2003
Long synonymous with "free," at least in the minds of CFOs, Linux will acquire new associations in 2004 as the New Age mysticism that surrounds it gives way to significant momentum, increasing possibilities and strategic decisions aplenty. Linux, the computer operating system architected by Linus Torvalds and now continuously maintained and enhanced by a worldwide network of often passionate devotees, is fast closing in on (allegedly) more expensive, proprietary Unix-based operating systems from Sun Microsystems, IBM, Hewlett-Packard, and others. Already solidly entrenched in the corporate mainstream from Wal-Mart to Morgan Stanley, Linux is also reportedly humming away on government computers in China, and the city of Munich recently opted for Linux over Microsoft as a desktop operating system for 14,000 municipal employees.
Forrester Research indicates that 17 percent of the 877 largest North American companies currently use Linux, and says it will gain so much ground in '04 that CIOs will be challenged to keep it under control. A lawsuit brought by The SCO Group against IBM on intellectual-property grounds shows no sign of slowing the acceptance of Linux, as major IT vendors pledge to indemnify customers against any thorny legal rulings.
The choice of a computer operating system is generally not a debate CFOs wade into, but analysts warn that misconceptions about the true cost of Linux may create false expectations among the swath of C-level executives who set IT strategies. "Every time there's an article in the New York Times trumpeting how much money some company saved with Linux, CFOs pressure their IT managers, wanting to know why they aren't saving $10 million, too," says Brian Richardson, program director at Meta Group. "Yet it's important to remember that in a Fortune 500 data environment, Linux is basically another flavor of Unix. While it may be nominally free, you do have to pay for the hardware and software and the services that run on top of Linux." ERP software, for example, is priced the same whether it runs on Linux or a proprietary system, and while Dell will happily ship a server that runs Linux or one that runs some other system, either way the box costs what it costs. Claims of a free lunch, says Richardson, are greatly exaggerated.
Not that he is a Linux naysayer. "We've noted continual improvements in the Linux kernel, as well as technological improvements in the hardware, in terms of Intel-based server performance and pricing," Richardson says. "Linux is a bottom-up strategy much the way Windows was five years ago. And it does give IT organizations more choice—you can get a Linux box from IBM, HP, or Dell, so you can play the hardware vendors off each other price-wise."
Evidently IT groups are doing just that. Meta Group projects major server operating system market shifts by 2006, away from Unix/RISC toward Linux on Intel (a choice dubbed "Lintel"). It's not alone. Research firms Gartner and IDC also have identified Linux as the fastest-growing enterprise operating system in terms of shipments and agree that it will soon surpass Unix.
In 2004 the Linux community faces several obstacles in making the system truly mainstream. Security, for starters. A report issued by London-based mi2g's Intelligence Unit, which collects data on hacker attacks, indicates that Linux-based systems are hackers' favorite targets, which will no doubt surprise many given the negative publicity that attacks such as the Slammer worm have brought to bear on Microsoft-based systems. In August fully 67 percent of successful, verifiable hackings against online servers were aimed at Linux, with Microsoft Windows a distant second at 23.2 percent. Altogether, 12,892 Linux online servers were breached successfully, the report stated.
Richardson, however, says the "big issue" with Linux is not security, but whether those ancillary "care and feeding" costs actually surpass those of proprietary systems. He says his research indicates that they do, but this is a contentious point within the research community. Of more interest to CFOs who want to follow the progress Linux makes in 2004, he says, will be the impact greater vendor acceptance has. "As leading system-management vendors like Computer Associates continue to port more of their tools to Linux," he explains, "we expect its support costs will decline."
Sam Greenblatt, senior vice president and chief architect of the Linux Technology Group at Computer Associates International in Islandia, New York, says CA takes Linux seriously. "I have a major client, a Wall Street firm, that has been able to get its derivatives processing time down from four hours in their old Unix proprietary environment to half an hour using Linux."
Triumphant tales of Linux versus Unix are common, but what about the other end of the spectrum? The city of Munich deal to put Linux on the desktop may be a sign of things to come. Indeed, much of the interest around Linux, even for spectators, concerns its viability as a competitor to Microsoft. While Meta Group's Richardson says he's seen little momentum for desktop Linux in the United States, a much-publicized June memo by Microsoft CEO Steve Ballmer dubbed Linux a "competitive challenge" and exhorted the troops to rise to it accordingly. He suggested that much of the support for Linux in the corporate sphere stems from a new (and, in his view, mistaken) belief that we are now in a "post-technological" era in which "good-enough" technology is, well, good enough. Whether that is at the heart of a company's decision to embrace Linux is debatable, but as a starting point for CFO-CIO discussions on the topic, it's more than good enough.