Many businesses besides Amazon.com have saved money by using Linux; Google and other Web portals also make use of the operating system. The cost savings with Linux depend on a variety of factors including the following:
* A company's skill levels and the degree of outside support needed
* The leverage that can be achieved by capitalizing on a fixed configuration and operating system environment over many sites
* The complexity of the application
* The size and cost of migration from a legacy environment
* Software and licensing fees that can be saved by using open-source equivalents
* Scalability and suitability for the application
In short, Linux yields the most savings, compared with Unix or other operating systems, where Linux servers have a dedicated function, such as Web server, caching or proxy, and where the environment can be replicated over many servers--to hundreds or thousands in a server farm, for example.
That means Linux does best in highly replicated arrangements as a low-end extension to Unix. As the software stack running on top of Linux becomes more complex or comprises commercial proprietary elements, Linux's cost advantage over Unix will shrink.
At Amazon, Hewlett-Packard's Unix OS, HP-UX, still hosts the business-critical database and enterprise applications. It remains unclear whether Linux will maintain similar cost advantages at the high end; Linux could prove even more costly than Unix in these environments, depending on the factors listed above.
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Another big issue is how broadly the cost savings to end users will benefit vendors. To the extent that the Linux opportunity adds to a vendor's traditional markets and products, Linux will attract developers (that is, independent software vendors, or ISVs) and system suppliers. However, suppliers and ISVs will need to fashion new business models shaped around value and service enhancements.
Currently, the low end doesn't offer financial benefits focused on the operating system itself. Vendors such as IBM, Oracle and Veritas bet that as Linux moves up the enterprise food chain, the operating system will drive ample opportunities for value-based products and services.
Meanwhile, venture capital funding has become scarce, thereby dampening start-up Linux opportunities. Until the commercial ISV community sees sustained profitability, Linux will face its own version of the glass ceiling. Businesses will continue to demand cost savings in commodity technology, ease of integration, and flexibility in choice.
Vendors must meet those needs by delivering the benefits the consumers expect while at the same time deriving reasonable profits and incentives to drive further initiatives and innovation from Linux.
(For related commentary on the viability of Linux vendors, see Gartner.com.)
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