IBM bets a billion on Linux

IBM plans to invest $1bn in Linux in 2001 and another $4bn during the next three years building hosting centres specifically for ebusinesses.

Lou Gerstner, IBM chairman and chief executive, said this week that Big Blue is "betting a big piece of IBM's future on Linux".

"Fifteen hundred IBM developers are dedicated to Linux-enabling our products and services, and not just for applications that run on a wristwatch, which we've built by the way," he added.

Speaking at the eBusiness Expo and Conference in New York, Gerstner predicted that the number of companies selling proprietary operating systems would fall as more buyers look to open source platforms such as Linux.

"I believe Sun, and for that matter, EMC and Microsoft are running the last big proprietary plays we'll see in this industry for a long time to come."

Gerstner said IBM is also planning to step up its spending in e-sourcing, which he defined as the logical extension to outsourcing and is worth $6bn, growing to $55bn by 2003. "An increasing number of customers will buy IT as a utility, like a service over the web," he said.

IBM plans to spend $4bn during the next four years creating an additional 50 ebusiness hosting centres, on top of the company's 175 data centres, 25 of which already host ebusinesses.

Gerstner said businesses would turn increasingly to open source, standard software as they seek to connect to customers and in-house staff to information systems through web-enabled devices such as wireless handhelds and game consoles.