South American bank switches to Linux

Bank chooses the free operating system in 'landmark' deal for financial institutions

Venezuela's Banco Mercantil has become one of the world's first major financial institutions to port its back-end infrastructure to Linux, the open source operating operating system that is built by volunteer programmers around the world, distributed for free and yet now provides proprietary software vendors with serious competition.

Banco Mercantil -- one of the largest banks in Venezuela with 375 branches -- has already replaced 30 NT servers with a single IBM mainframe, a S/390 G6, running the SuSE flavour of Linux, and plans to move its Sun and HP servers over to Linux shortly.

"This landmark project is a breakthrough for Linux in the banking sector and is yet further evidence that Linux for the enterprise is here today," said John Morris, vice president, IBM eServer z900 in a statement. "The combination of Linux and the mainframe provides Banco Mercantil with the superior technology necessary to meet the demands of the uncompromising financial sector."

The deal also illustrates the commercial viability of open source software such as Linux, said Dirk Hohndel, chief technical officer for SuSE Linux. "SuSE Linux, with IBM's mainframe server, delivers a powerful, high-performing and economical solution for the banking industry," he says.

However, the deal also coincides with Microsoft decision to step up opposition to software groups that promote freely sharing software code. Senior vice president of Microsoft Craig Mundie is expected to make a speech today at the Stern School of Business at New York University claiming that the open source movement poses a threat to companies' intellectual property.

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