Linux firms sing the big blues

IBM has been good for Linux, but it may not be good for the Linux companies, industry executives say.

IBM has been good for Linux, but it may not be good for the Linux companies, industry executives say.

Even as Big Blue pushes Linux into the mainstream, some executives from major Linux companies are grumbling behind the scenes.

"Linux helps IBM sell things, but IBM doesn't really help the Linux companies," says a senior executive at one Linux firm.

However, IBM doesn't see it that way. Scott Handy, IBM director of Linux solutions marketing, says allies like Caldera, Red Hat, SuSE and TurboLinux can generate revenue from their IBM partnerships by selling software, software bundles and support.

"They're also in the service play by supplying Level 3 technical support," says Handy. "We complement each other and gain customers while scaling into the enterprise. In general, IBM Global Services has the overall contract, and [the Linux companies] get the back end."

IBM's recent decision to invest $1 billion in Linux development in 2000 gave some Linux stocks a shot in the arm, but several of IBM's Linux allies are not happy with their respective business arrangements with Big Blue.

Linux executives, speaking on a condition of anonymity, say the current way of doing business with IBM is not as lucrative as they thought it would be. For instance, Red Hat, SuSE and TurboLinux believe they are not being well-compensated for agreeing to support IBM's complete eServer line. At least one executive at SuSE, which supplied the mainframe Linux for a major ISP installation at Telia, says the company will be unable to recoup the costs of creating and supporting S/390 Linux under the existing deal.

SuSE's not alone. Some TurboLinux executives are having second thoughts about agreeing to support the complete IBM eServer line. In TurboLinux's case, company executives say it has its hands full with its own clustering work and attempting to be first to market with Linux for the Itanium.

In addition, some TuboLinux execs say the company would be better off concentrating on its own products.

The Linux companies' complaints aren't limited to not enough payback for supporting Linux on eServer. One top Linux company executive says Linux vendors do not get acknowledged publicly. "[While there is] a lot of value to the IBM name and that's helped with Linux acceptance, IBM also wants IBM to be the story, not Linux, and certainly not the Linux vendors," says the executive.

For instance, when IBM issues a press release promoting a Linux customer win, Big Blue often does not mention which Linux distribution the customer is using.

Not all Linux companies are in the same boat. Caldera decided to focus on its strengths, rather than partnering with IBM across the eServer line.

"Our commitment to IBM is that we'll continue to focus on the Intel architecture," says Benoy Tamang, Caldera's VP of strategic development. "We could not afford to make commitments we couldn't deliver on, so we're continuing to focus our energy on Intel."

Also, Caldera, which is finalizing its acquisition of SCO, eventually will sell AIX 5L--the last fruit of Project Monterey's attempt to unify Unix. Caldera's immediate concerns, though, are to stay focused on Intel Linux, SCO OpenServer and UnixWare.

In contrast to Caldera, the three other major Linux players--Red Hat, SuSE and TurboLinux--have committed to supporting IBM's entire eServer product line.

So far, Red Hat is faring well because it has the resources and partnerships to compete for high-end customers. "[Red Hat will] have direct relations with customers where we'll provide Level 1 through 3 technical support," says Paul McNamara, Red Hat's VP of products and marketing.

McNamara says he also expects Red Hat and its partners to land jobs where Red Hat, not IBM, is the primary partner.

Is IBM good for Linux? Of course. But, according to the Linux vendors themselves, the answer is much less clear when it comes to their own Linux businesses.