It's a Linux world after all

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New York this week will play host to all things Linux, as advocates of the open source movement convene to promote their wares, tout for custom, swap business cards and make their case for the Microsoft alternative. This Wednesday sees the opening of the LinuxWorld Conference and Expo and you can expect to see a whole host of Linux customers trotted out to illustrate how the operating system is not just for geeks but also for established companies. Leading Linux seller Red Hat will share the stage with Morgan Stanley, HP will announce that Unilever is buying its Linux servers, and oil company Amerada Hess is using Ximian's Red Carpet service for updating software. Although the show suffered a little when the late-nineties hype surrounding Linux quietened and the general tech malaise took hold, the open source movement has remained a fixture on the computer industry agenda, and attendance is recovering. Exhibitor numbers are increasing from 120 a year ago to 150, show organisers IDG World Expo said, while the 16,800 attendees is also expected to grow. Professional prognosticators are heady with optimism about the surging use of Linux - particularly on servers. Meta Group believes Linux will run on 45 per cent of servers by 2006 or 2007. Gartner expects Linux server shipments to double to 800,000 from 2002 to 2003 with $4bn in sales. And Goldman Sachs believes Linux will be used not just in today's stronghold of low-end servers, but in high-end systems that run the most important tasks as well. Linux specialists, though, are having a harder time than many established computing companies in skimming revenue out of all that business. Bill Claybrook, Aberdeen analyst, said: "These guys have to figure out how they're going to generate some money. If Red Hat Advanced Server is part of a deal with Oracle [9i database software] on a cluster of four Dell machines, each of which has four CPUs, Oracle gets $60,000 per CPU, or $960,000, Dell gets $150,000 or so for the hardware, and Red Hat will get $10,000." One of the appealing features of Linux is that it's available from several companies, increasing customer choice. But the Linux companies are working to ensure their customers won't be as likely to switch, said Giga Information Group analyst Stacey Quandt. "What Red Hat and SuSE have to do is create an annuity revenue stream," customer dollars that will recur quarter after quarter. The Red Hat Network, designed to ease computer administration, is Red Hat's mainstay for that recurring revenue. At the show, newly profitable Red Hat will show improvements to the Red Hat Network made possible by its $1.2m acquisition in October of NOCpulse, a company whose software is used to monitor server performance and alert administrators to bottlenecks. Red Hat will show the NOCpulse software integrated with Red Hat Network, Mark de Visser, Red Hat's vice president of marketing, said in an interview. Red Hat promised the integration would be done by early 2003. Lock-in might be nice, but Linux companies are aware that customers like standards, too. Red Hat will announce its Advanced Server version complies with the Linux Standard Base, an effort to unify some workings of Linux, de Visser said. In addition, the next version of Advanced Server will be released in the second half of 2003. Red Hat also will show a prototype version of its coming Advanced Workstation version for Pentium, Xeon and Athlon computers, de Visser said. The final version is expected near the end of the quarter, he said. SuSE, Red Hat's chief rival, is being more aggressive in its desktop Linux push. The company will unveil its Linux effort which uses software from CodeWeavers that can run some Windows programs on Linux. Many companies would like to replicate with Linux some of the success Microsoft has had with desktop software, but Linux won't allow that kind of power to go to a single company, said Linux advocate Bruce Perens, a former leader of the Debian Linux version. "People have these dollar signs in their eyes as being the next Microsoft. The trouble is, Linux makes it too easy for there to be competitors for anybody to have 40 percent (profit) margins," Perens said. "Chasing after the pot of gold is drawing people pretty far away from the community spirit." For established software companies that already support several operating systems-Oracle, SAP, Computer Associates and BEA Systems, for example-Linux isn't that hard to accept. One of their biggest needs now is being met as Red Hat and the UnitedLinux consortium each build in features the software companies need and provide an a relatively stable island in the chaotic world of Linux development. Software companies at the show include BEA Systems, which sells software to run Java business programs such as a Web interface to a bank's main computer system. Jefferson County in Colorado has used BEA's software on Linux servers to run its government services. At the same time, JBoss, a company that sells an open-source competitor to BEA's software will announce software on Wednesday that allows programs written for BEA servers to be moved to JBoss servers. All four major server sellers also now are Linux converts, though each with different strategies for benefiting from Linux. Sun Microsystems, the most recent convert, is aiming Linux for low-end servers; Hewlett-Packard, for those systems and higher-end Itanium 2 systems, Dell for its server line up through clusters of eight-processor servers; and IBM for every single model of the dozens of servers it sells, even million-dollar mainframes. HP-which has hired some cast members of hit TV show The Sopranos to grace an evening reception-will announce customers including ASP Futuro Bolivia, which uses Linux and Oracle 9i RAC using four, four-processor HP servers to manage the pensions of about half the retirees in Bolivia, said Judy Chavis, director of HP's Linux program office. The company also will announce new Intel-based workstations with Red Hat Linux 7.3 pre-installed. HP has pulled back from one Linux effort, however, canceling its Secure Linux version. "We're not in the distribution business," Chavis said. "We're going to partner with Red Hat and UnitedLinux." HP also will announce support for the four versions of Linux that are in the UnitedLinux consortium. IBM will announce pre-configured bundles of software based on SuSE's version of Linux and geared for its zSeries mainframes. And at the other extreme of computing power, it will announce a handheld computer hardware template using its new 405 LP processor and MontaVista Software's consumer electronics version of Linux. On the software side, IBM will announce that the Netscape web browser now can be used to tap into Big Blue's Lotus Domino e-mail software through the iNotes software. Microsoft, which has rented booth space at the show, continues to grapple with the rise of Linux. Its strategy has shifted over the years, said Pete Houston, Microsoft's senior director server strategy. Two years ago, Microsoft was on the warpath against the General Public License (GPL), the licence that keeps Linux freely available and that is so contrary to the proprietary Microsoft philosophy. The strategy then changed to a rebuttal on technological terms, and now is shifting again, Houston said. "The third phase, which we're entering now, is a focus on business value-of understanding the value of our offerings to them versus the shortfalls of Linux," Houston said, adding that Microsoft anticipates the jobs customers will need to do and builds its software accordingly. "I don't see the Linux community development model building the integrated offerings we have today." Microsoft should have plenty of breathing room. The software giant's revenue of $8.5bn in the most recent quarter already dwarfs the $280m that market researcher IDC believes Linux operating system sales will garner in all of 2006. But while many think Linux isn't directly stealing away too many Windows customers, it is cutting into new markets Microsoft had hoped to take over. "Microsoft...has always seen itself as replacing Unix. That ain't going to happen. Linux is going to replace Unix," Claybrook said. In coming years, Linux, not Windows, will take over high-end computing tasks currently handled by Unix servers in "data centres" at the core of corporate computing operations, Claybrook predicted.