Some industry observers would have you believe Linux is an opportunity in disguise. If so, then why has take-up outside its core areas been so slow? Paul Bray reports
The year 2000 will be important in the land of Linuxput. This imaginary land is the spiritual home of the thousands of software enthusiasts who develop Linux, the Open Source version of Unix that has generated so much interest over the past year.
By the end of 1999, Linux had made lots of friends in the IT industry - software houses, hardware vendors, major distributors and a few corporate users. But most of these organisations appeared to have done little more than make noises and invest a bit of time and development effort in return for a slice of Linux's huge publicity.
All manner of excuses were made for the lack of take-up of Linux outside its core areas of ecommerce and web servers, from the effects of Y2K to the absence of reliable technical support. But the millennium bug has been squashed and major Linux distributors such as Red Hat, Caldera and Suse are putting the operating system on an increasingly commercial footing, with the backup expected from a mainline software product. Linux is running out of excuses and positive commitment is needed. There are signs that it is coming.
"I have a growing conviction that Linux is really going to happen," says Andy Butler, a research director at GartnerGroup. "Until the end of last year I'd have said nobody had made a commitment to Linux that they couldn't walk away from. But now people are beginning to ask about the products. By this summer, Linux will have entered a make-or-break phase, and by this time next year we will either be saying, 'Wow, that was great', or 'That was a flash in the pan'."
Michael Trup, managing director of Linux distributor Interactive Ideas, predicts a major take-off this year. "Our estimate is that the UK Linux market in 1999 was 100,000 units across the various distributions," he says. "I think we will at least double or triple that this year."
Serious commitment the route to success
Although it is often difficult to judge, commitment from many vendors seems genuine. "SGI is recrafting the whole company around Linux," says Butler. "It's betting on Linux being a huge success and on people wanting a hardware vendor that really understands Linux."
IBM, it is widely accepted, is serious about Linux, offering it as an option on its Netfinity Intel based machines with IA64 developments in the pipeline, and providing 24 hour Linux support. In January, IBM moved its internet guru, Irving Wladawsky-Berger, to head its Linux business and gave its journal file system to the Open Source community to help boost the enterprise features of Linux. IBM also has a stake in Red Hat.
"We've shifted up a couple of gears," says Adam Jollans, Linux marketing manager at IBM. "We think Linux is going to be fundamental to the next generation of the internet. It gives the same kind of open platform on which the internet was developed." He adds, however: "Linux can't give the same levels of reliability throughput as other versions of Unix or mainframe operating systems."
Hewlett Packard also seems committed. "Our platform strategy is to focus on three operating systems: HP-UX, Linux and Windows," says Terry Walden, Unix marketing manager at Hewlett Packard. "This year we'll be bringing more Linux to market, including IA-64 and PA Risc."
Compaq, like IBM, has a stake in Red Hat and supports Linux on both Alpha and Intel platforms. Sun Microsystems has begun giving Solaris 8 away free to developers and non-commercial users, and PC manufacturers including Dell and Gateway offer Linux as an option.
Linux versus Unix
Of course, existing Unix vendors must square Linux with their proprietary Unix sales and some observers doubt their ability to do this. "Each vendor has a major investment, not just in its own operating system, but also in its hardware architecture," says Ed Wrazen, practice director at technical consultancy CITL.
"They seek to differentiate by building best-of-breed, high-performance Unix, coupled with their own chipsets. They want to lock customers into using their brand of Unix and their hardware because that's where the margins are."
But the vendors' response is pragmatic. "If customers move off HP-UX, I would rather they moved to NT or to HP's implementation of Linux," says Walden. "We see that as a natural migration."
IBM is positioning Linux as a competitor to NT, not to AIX, its own brand of Unix. IBM believes AIX will continue to keep ahead of Linux in performance and resilience, although the next release of AIX will have an emulator for running Linux applications.
Linux is also winning allies among software vendors. Enterprise resource planning (ERP) giant SAP completed its Linux port late last year. "SAP has been inundated by large companies wanting to be pilots for the Linux implementation of R/3," says Butler.
Novell recently released some of its Novell Directory Services network management code as Open Source, and has bought a stake in Red Hat. Oracle also has a Red Hat stake and has Linux versions of some of its core software, as do rival database vendors Informix and IBM. DB/2 Lotus Domino and Borland's JBuilder toolset are available for Linux, with Borland's Delphi development environment on its way.
Computer Associates says Linux is a strategic platform, while Corel has gone further, not only porting WordPerfect and Draw to Linux, but releasing its own distribution of the Linux source code. "Corel gives Linux a level of respectability," says Richard Wiltbank, European director at rival Linux distributor Caldera. "It has raised the profile of Linux quite a bit in large corporations."
Corporate sales and server functions
But, however many vendors commit to Linux, the burning question in the land of Linuxput will be: who's actually buying it? Linux's core market is ecommerce, with a significant proportion of web servers already running Apache, a Linux-based Open Source product.
Other server functions, such as file and print, email and application serving, are well supported by Linux products and could yet see strong growth. IDC figures suggest that nearly a quarter of Intel based server shipments in 1999 were on Linux - up from 17 per cent in 1998 - and GartnerGroup estimates that the worldwide Linux application server market may be worth between $3bn (£1.9bn) and $4bn by 2004, compared with $20bn for NT. Ecommerce and appliance servers are also likely to be Linux growth areas.
Technical workstation implementations such as computer-aided design are increasing - it is possible to use clusters of Linux servers as mainframe replacements. And because of its relatively small footprint, Linux scales down well for smaller devices such as personal digital assistants and mobile phones, and is already being used in appliances like satellite receivers.
Linux vendors have won a small number of high-profile corporate sales. Energy company Amerada Hess replaced its IBM RS/6000 GIS system with 32 Intel-based workstations running Linux for a fraction of the cost. Insurance company Reliance Mutual equipped a 165-seat claims department with low-spec Linux PCs. Another insurance company, Hill House Hammond, runs its core branch network on 290 Netfinity servers running Linux.
Freeserve runs its entire ISP operation on Linux. Powys County Council saved 90 per cent on the cost of providing internet access to schools. Other Linux rollouts are in education, the public sector, ISPs, telcos and specialist technical users.
But corporate sales remain small. Robert Jefferson, commercial director of Compaq reseller Hawke Systems, says: "We haven't had a strong demand for Alpha machines running Linux, and we haven't seen many people going live on major projects. I don't think we'll see major Linux implementations until later this year."
SMEs could be a better target than corporates, being faster-moving, but resellers and vendors report little pattern to the commercial take-up of Linux.
Intel remains the most popular platform. "What we sell the most of are the Intel versions," says Trup. "Sales of workstation versions are minuscule."
Desktop applications are still thin on the ground and a lack of a UK business accounting package makes Linux less attractive for general office use by many smaller businesses that might otherwise be its keenest converts. "There's a pretty comprehensive list of applications on the server side," says Jon Collins, a senior analyst at Bloor Research. "Linux's weakness is a lack of applications on the desktop."
Convincing the corporates
If Linux really is to hit the commercial big time, it must convince buyers that it is a big-time commercial operating system. "Blue chip firms look for global technical support and certified resellers," says Iain Farthing, north European channel sales manager at Red Hat. "We became more commercial last year and can now provide 24-hour support."
Reseller schemes are also in place. Red Hat's training courses for certified engineers have a certified reseller programme similar to Microsoft's certified solution provider but without the entry fees. Caldera is setting up similar schemes.
Red Hat already sells through sales operations such as Action Computers, Software Warehouse, Virgin and Dixons and has distribution agreements with Ingram Micro, Computer 2000, Ideal Hardware, Gem and Linux specialist Interactive Ideas. Now Unipalm and Unidirect have been signed to give access to Oracle and SCO resellers. Caldera hopes to sign two suppliers soon and have 50 resellers in the UK by the end of the year.
Mainstream resellers are doubtless still concerned about the prospects for selling something that can be downloaded for free, or bought once and installed a thousand times. But margins on support and services are similar to commercial operating systems, and while some observers think Linux will force down the price of Unix, others are convinced the price of Linux itself will rise sharply.
"The cost of Linux is bound to rise," says Gary Barnett, a senior consultant in tools and architectures at analyst Ovum. "When you buy HP-UX, for example, you're paying not only for the source code, but for all the additional services."
Gartner believes the cost of Linux could rise to between $500 and $1,000 per seat by the end of 2001. Customers will expect a full commercial operating system for that kind of cash, and Gartner says it is up to Linuxputians to provide it.
"Customers want Linux to work," says Butler. "But they want vendors to come up with a proper Linux strategy."
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