Red Hat and Caldera get in the ring

Dozens of distributions are stepping into the US ring. But only two heavyweights - Red Hat and Caldera - pack serious business punch. Which one will be the champ?

More than 100 Linux distributions litter the worldwide landscape. Publicly, most US hardware and software providers have vowed to support four major versions: Caldera, Red Hat, SuSE and TurboLinux. Not to be left out, slash-dotters love Debian, and upstart Mandrake is wildly popular in retail.

Still, experts say Linux market consolidation is imminent because there is too little differentiation among many versions. What's more, many distributions generate little revenue or ship for free with trade magazines. Choose the wrong Linux distribution, and you could wind up with a bankrupt open source partner.

What's a solutions provider like you to do? Place your bets on Caldera or Red Hat. That's what most US-based hardware and software companies are doing.

"We're picking Red Hat to win and Caldera to show [in the United States]," says a software expert at IBM. The source requests anonymity because he does not want to alienate SuSE and TurboLinux, which have a very strong following in Germany and Asia, respectively. IBM has partnerships with both firms.

"There are a lot of different [Linux] distributions out there," adds Michael Danzinger, director of strategic business alliances at Computer Associates (CA). "But IT managers will only hang their hats on those that are properly supported. We're going to let customers decide who the winners are. It's really a regional story. In the United States, Red Hat and Caldera are the Linux distributions we hear about most."

Danzinger notes that CA also has tight relationships with SuSE and TurboLinux.

Linux used to be the operating system of rebels, innovators and IT outsiders. But things have changed. Today, IBM, CA and other enterprise players want to push Linux directly into Fortune 500 data centres. After shipping 1.3 million server licences last year, Linux has overtaken NetWare and Unix to become the world's number two server operating system, trailing only Windows NT, according to IDC.

Caldera and Red Hat are riding the Linux tidal wave and generating record sales. But their success has less to do with technology and more to do with strategic business planning. Caldera and Red Hat both have seasoned management teams, firm financial backing and solid partner programs that include high-tech giants like Oracle.

Still, neither Caldera nor Red Hat can afford to pull any punches. While Linux shipments continue to skyrocket, both companies face several tall challenges, including mounting financial losses, deflated stock prices, potential staff defections, some skeptical Fortune 500 customers, and fierce competition from Microsoft and Sun Microsystems.

Just ask Lante. The Chicago-based Web integrator runs Solaris, Windows NT/2000 and Red Hat Linux in its development and testing labs, but has yet to perform a corporate Linux installation. "Our customers run mission-critical apps on Solaris and NT," says David Trowbridge, director of technology at Lante. "We don't see [Linux] enjoying acceptance in our customer settings at this time."

Caldera and Red Hat intend to change that. Backed by charismatic leadership, both companies made early commitments to develop Linux for low-end business servers and Internet servers. They also invested heavily in the reseller channel, vowing to offer a single point of contact for education, certification and support.

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