Look who's joining Linux bandwagon

A small -- but growing -- number of startup hardware makers are nuzzling up to the penguin pennant

Hundreds of software entrepreneurs, large and small, have jumped on the Linux bandwagon in the last year. But the newest converts to join the ranks include a small -- and growing -- number of startup hardware makers.

Among the more recent to run up the Penguin flag is Netmachines, a startup that sells a Linux-based server appliance based on Celeron processors made by Intel.

There are only a handful of companies making Linux server appliances, but analysts believe this sort of device has the potential to become an entry-level Internet access, e-mail and file server for millions of small businesses -- that is, if the companies can remove some of the complexity of working with Linux, adding features such as easily understood graphical user interfaces. Embryonic market Peter Tsepeleff, Netmachines' president and CEO -- who says this market is still in an embryonic stage -- says the rapid emergence of Linux is changing all that. "Six months from now, we could be the leader," according to Tsepeleff, who says the company's hardware and software combination is less expensive and easier to install and use than a corresponding Windows NT implementation. The company previewed prototypes of the RedRak at last week's ISPCON trade show in San Jose.

The device features Red Hat Linux along with a customised user interface based on hypertext markup language. RedRak servers can be stacked or rack-mounted by Internet providers. The removable hard drive design lets ISPs or small businesses remove the drive and install it on another unit if the first RedRak server fails.

The company chose Linux because it's "a platform that's widely accepted," Tsepeleff said. "The beauty of it is that it's inexpensive. You don't have to spend thousands in licensing fees." That's an argument some analysts find convincing.

"Small businesses don't need all the bells and whistles that Windows NT gives them," said Eric Klein, an analyst at The Yankee Group in Boston. "You don't get anywhere near the functionality you get with (Microsoft's small business server). But there are Web applications that maybe can replace most of that functionality." Netmachines, which says RedRak will handle a number of functions ranging from e-mail to FTP hosting, expects to begin shipping the product in December. Pricing will start at about $999 (£599) for a basic configuration that includes a Celeron running at 300MHz or 333MHz, 32MB of RAM, a 6GB hard drive and four cooling fans. Netmachines will have to contend with more established companies that are already selling Linux-based servers for small and medium-size businesses and ISPs. The market for Linux as a server operating system represents a large number of units.

Linux took a 15.8 percent share of 4.4 million shipments of server software in 1998, according to International Data Corporation(IDC tracks sales of packaged Linux software, so the actual number of copies of Linux operating systems that were used for servers in 1998 could be higher.)

IDC also expects the market for thin servers to account for as much as $16 billion by 2002. Although the estimate likely includes a number of other devices besides just Linux server appliances, the potential magnitude of that market has attracted the attention of more established players.

Industry behemoth IBM, for example, recently bought a Linux server company and now rents the hardware and provides related services for a monthly fee. Sub-$1,000 wares But Netmachines' next closest competitors look to be Rebel.com and Cobalt Networks, who are both shipping Linux server appliances for less than $1,000.

Rebel.com, formerly Hardware Canada Computing, which purchased its Netwinder product line from Corel's Corel Computer division, is shipping a Linux server appliance called Netwinder OfficeServer. Netwinder, like Netmachines' RedRak, is aimed at providing an easy-to-use server for small and medium-size businesses. The device is somewhat different from RedRak in that it utilizes an Intel StrongARM processor. It aims, however, to provide similar functionality and ease of use with an HTML-based user interface. Rebel.com's Netwinder starts at $895 and can handle e-mail, print serving, file sharing and shared Internet access. It can also be used for Web hosting.

Cobalt offers a broad line of Linux based servers. Its Qube 2, for example, offers built-in e-mail and discussion group capabilities for a price starting at $999. Refinement needed Linux has enjoyed an undeniable boomlet of demand in server settings; it is possible to set up a complex environment in which file servers, print servers and e-mail servers each run on their own Linux box.

Still, more work remains to refine Linux to the point where it becomes a snap choice for small businesses operating without an IT staff. "Some people will find those boxes very attractive. But others will be hopelessly confused by them," said Dan Kusnetzky, director of operating environment and serverware at IDC. Efforts are underway to develop graphical user interfaces to make Linux easier to use for non-technical users. Though progress is being made, Kusnetzky said Linux still isn't ready to be sold via television infomercials. "But (that day) is not that far away, either," he added.

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