The Whole World in Linux Hands

Operating System Finds Joiners in IT Businesses, Large and Small<@VM>COREL<@VM>SCO<@VM>SILICON GRAPHICS<@VM>SuSe<@VM>Top Linux Vendors: Number of server units shipped, fourth quarter 1999

By Trish Williams

The continuing stream of business announcements from small and large information technology companies pegged to the exploding Linux open-source software market offers a powerful testimony to the growing popularity of the operating system.

Not a day seems to go by without news of yet another start-up linking its future to the success of the Linux operating system, or about some new alliance among larger players in the swelling crowd of vendors offering assorted Linux software products and professional services to customers worldwide.

"In the space of two years, the Linux operating system has become a force in the IT industry," blared a recent newsletter from International Data Corp., a market research company in Framingham, Mass. IDC has projected Linux will grow faster than all other operating systems combined through 2003.

And some fresh IDC numbers bear this out. Linux server shipments increased 166 percent to 72,422 units in the fourth quarter of 1999 from the same period a year earlier, "representing the fastest-growing operating environment in the server market," according to the latest IDC Worldwide Quarterly Server Tracker.

As a challenger to Microsoft Corp.'s Windows NT and its Unix cousin, Linux rapidly is gaining acceptance for its speed and flexibility in powering Web servers. Developed by Linus Torvalds and a team of programmers over the Internet, some of Linux's features are multitasking, virtual memory, shared libraries and multiuser capabilities.

Contributing to its appeal are its low total cost of ownership, stability and rapid development cycle; changes proposed by users are quickly reviewed and tested.

"Even though Linux represents a small portion of the entry server market in unit shipments, it will become an important area of growth within the server market as more and more branded vendors come out with Linux server offerings, and as end users select Linux servers not just because of price but because of reliability, availability and performance," said Hoang Nguyen, a senior research analyst for IDC's Worldwide Quality Server Tracker, in an April IDC report. IDC defines the entry market as systems shipped with prices of up to $100,000.

Although the Linux system is free off the Internet and can be copied and distributed without restrictions, some companies offer versions that come equipped with applications, tools and support that make it convenient for users to install for little money. Such firms are Caldera Systems Inc., Ogden, Utah; Canada's Corel Corp.; Red Hat Inc., Durham, N.C.; and the private German company SuSe Linux AG.

The growing number of Linux users worldwide is prompting organizations to consider its potential in the corporate, government and educational computing environments, analysts and industry officials said.

"It's very close to being mainstream. Everyone has Windows on their system now, but as more and more people want to try more things and become more technically savvy, you'll see more companies providing Linux solutions," said Mark Hopkins, director of corporate and government sales for Corel Corp., Ottawa, which developed the first Linux operating system built specifically for the desktop.

"Today, there is no mass deployment of Linux. It's really a machine here and there," said Steven Sundman, who oversees SCO's Government Systems Group in Reston, Va. "Most major [government] organizations are at least dabbling with Linux in the lab, but the usage is generically as a Web server or some other special purpose function, such as a firewall.

"But there are huge benefits to have the flexibility to customize the system to get it to do exactly what you want it to do," Sundman said.

Government users of Linux include the Energy Department, the National Institute of Standards and Technology, NASA and the Postal Service, as well as selected laboratories and units of the U.S. military, government and industry officials said.

Red Hat, a leading Linux player, primarily services the government through a handful of channel partners. They include Government Technology Services Inc., a government IT provider in Chantilly, Va., that recently added Red Hat Linux to governmentwide acquisition contracts such as the National Institutes of Health's ECS-2 and NASA's Scientific and Engineering Workstation Procurement, known as SEWP 2.

"Budgets are tight, money is tight, and [agencies] want something that is secure. They want to have the support and productivity tools they need to make the thing work," said Corel's Hopkins. The next thing you will hear large companies and government agencies say is, "we really need to have this, it will save us money [and] it's stable."

As organizations worldwide consider its potential in corporate, government and educational settings, all the major IT vendors have addressed Linux at varying levels, according to IDC. For example, industry giant IBM Corp., Armonk, N.Y., has announced plans to put Linux at the heart of all its entry, midrange and high-end server families. And Silicon Graphics Inc. of Mountain View, Calif., recently announced that its XFS fault-tolerant journaling file system has been ported to Linux.

Red Hat, which sells a CD-ROM version of Linux that has technical manuals and support, is locked in a fierce market battle with SuSe, the leading Linux distributor in Europe; other competitors are Caldera Systems and Microsoft of Redmond, Wash. Red Hat had sales of $42.4 million for the fiscal year ending in February, according to Hoover's Inc. of Austin, an online business information source.

A glimpse of other international players jockeying for position in the hot Linux market, along with their executives' outlook for widespread adoption in the government market, indicates that the next big growth area will be in the database arena. By Trish Williams

Corel, which develops business productivity, graphics and operating system solutions on the Windows, Linux, Unix, Macintosh and Java platforms, has made several recent announcements regarding its desktop push in the Linux field.

Corel announced April 18 that it acquired a 10 percent equity stake in, whose products aid applications in the aerospace, education, government and health care sectors. Corel plans to integrate videoconferencing technology into Corel Linux OS to bring people around the world face to face.

Earlier last month, Corel announced that its CorelDraw for Linux product would be available in July rather than September. Corel calls it the first robust, full-featured graphics suite for the Linux platform, offering Linux users access to the same graphics tools now available only on the Macintosh and Windows platforms.

In addition, Corel released WordPerfect Office 2000 for Linux in March, and said that its Corel Ventura Publisher 8.5 for Linux and Windows will be available by the end of the year.

Corel Linux OS has enjoyed strong inaugural sales, and the company's planned merger with Inprise/Borland Corp., a provider of Internet access infrastructure and application development tools and services based in Scotts Valley, Calif., will enable Corel to offer a total back-end solution and create a huge opportunity to be a large service provider, Corel officials said.

The deal was announced in February and is expected to close in late spring. In 1999, the two companies had total revenue of $418 million, according to Corel.By Trish Williams

To Sundman, Linux presents a golden opportunity to build on the company's Unix-based professional services business heritage. The Santa Cruz, Calif.-based company had 1999 sales of $223.6 million.

"We have a well-established qualification of helping customers deploy systems on architecture which is similar," said Sundman, whose government group's professional services unit helps prospective government Linux customers assess their requirements and understand the technical aspects of moving to the open-source operating system.

SCO has invested in Linux applications manufacturer Caldera Systems and also made its Web-enabling software compatible with Linux versions offered by Caldera, Red Hat, SuSe and TurboLinux Inc. of Brisbane, Calif., the largest distributor of the Linux operating system in Asia.

SCO also has a number of direct associations with major integrators including Computer Sciences Corp., El Segundo, Calif.; Electronic Data Systems Corp., Plano, Texas; Lockheed Martin Corp., Bethesda, Md.; and Unisys Corp., Blue Bell, Pa., as well as original equipment manufacturers.

"We have a broad base of activity with systems integrators and primes in the local area," said Sundman, who would not provide a breakdown of the company's Linux-related revenue but acknowledged that SCO "did not see significant revenue related to Linux last year."By Trish Williams

For Jan Silverman, SGI vice president of marketing for servers and graphics, there is a strong parallel between the growing popularity of Linux and the Internet phenomenon. People who are working to further Linux "are passionate about where this thing needs to go and what it has to do to get there. It's like a grass-roots kind of effort all circulated around open source code."

And the Internet is the first place Linux-based systems were found to be reliable. "It caught on with Web servers, e-mail servers, with file and print servers ? all the Internet-oriented stuff," Silverman said.

But the database arena will be "the next major, major growth opportunity and an area where much effort is being devoted by SGI," he said.

He cited an SGI project now under way to install a 128-processor Linux cluster at the Ohio Supercomputing Center in Columbus. This project will enable Ohio scientists, educators and engineers to use the state's largest Beowulf cluster as a starting point into scalable high-performance computing.

Beowulf clusters are specialized supercomputers that are gaining popularity in the technical and enterprise computing market because of their high performance at a relatively low cost. Such clusters are used for solving very specific type of problems through what is known as parallel decomposing.

"We sold them a cluster of 133 Intel Xeon processors to create one of the first Beowulf clusters," said Silverman. Center officials are now looking at expanding their project to include a new SGI product "that would grow their cluster into a 64-bit node," he said.

Bioinfomatics is another big area that requires huge databases where many computers must look for matches. And that is another example of where Linux could be used. There are also countless potential government applications, including some in the classified realm, he said.

"Today, it's not mainstream, but people are saying, let's get a small cluster in here and see if it can work for us. That's what will explode into interest down the road."

At last count, Silverman's unit had more than 300 employees (both engineering people and Linux-trained field support people) "dedicated 100 percent to Linux ? bigger than most of the Linux start-ups." The company is now introducing the SGI 1200L (with Linux) server, which is designed to support demanding Internet applications as well as clusters of servers solving technical computer problems.

SGI's first Linux products came out last August, "well before Red Hat went public and before this Linux excitement came on," he said.

Right now, Silverman said, Linux-related revenue at SGI is not a significant piece of SGI's business. But the growth rate is beating company expectations and its value-added hardware is not due out for nine to 12 months.

"That's when it will be a real factor," said Silverman.

In the meantime, SGI's services and software business is picking up nicely, he said. The company gives 29 courses worldwide on Linux covering everything from getting certified to its Linux university series, "one of the most popular programs the company has introduced in the last five years."By Trish Williams

There have been many inquiries from government organizations in Europe about Linux, and interest among government agencies in the United States and abroad only will accelerate, said Volker Wiegand, the new chief executive of SuSe Inc., Oakland, Calif.

For one thing, discussions are now under way in Europe about changing "the big network environment," and Linux requires far less computer power than alternative operating systems, he said. Another attractive feature of Linux is the lure of a free or next-to-free system in a tight budget climate where government organizations must do more with less, he said.

SuSe Inc., the North American subsidiary of parent company SuSe Linux AG of Nuremberg, Germany, provides technical support, Premier Partner programs and sales support to customers, resellers and distributors. SuSe Linux AG is the leading distributor of Linux in Europe. Its package comes equipped with applications, user manuals, administrative tools and support, and claims 35,000 business customers worldwide.

Looking ahead, Wiegand said he believes more than 50 percent of the PCs in government use worldwide will use Linux within two years. The reason?

"Now you have to upgrade to Windows 20000 or NT; you have to buy new hardware. Governments want the newest software, but do not want to spend money. So they'll use Linux. It's free and secure, so what else could you want?" he said.

There is no question about growing European government support of the open-source software movement. Indeed, a draft document recently issued by the German government stresses the attributes of open-source systems, Wiegand said. Among its findings are that open-source software systems are "cheaper, more reliable, more secure [than alternative operating systems] and even run with older hardware," he said.

The SuSe executive and other executives whose companies promote Linux services and products point out another distinction: Software patches can be available within days of discovering a problem. Because of the unlimited access to the Linux source code, a large number of competent and expert users all over the world are contributing actively to developing Linux, these officials said.

"Microsoft and others bring up negative aspects [of the system], but in the Linux environment you probably have a fix within 24 hours. It's unbelievable if you have never seen it, but it is working and, as a matter of fact, it's more secure," Wiegand said.

In the United States, SuSe is working with partners such as SGI and Oracle Corp., Redwood Shores, Calif. "Like government people, they want high-visibility systems. So one of the key things for SuSe during the next 12 months will be to work with these companies and set up big databases that are very secure," he said.

In late February, SuSe and SGI announced plans to develop a version of Silicon Graphics' IRIS FailSafe clustering software for high-availability applications in Linux environments. In announcing the joint engineering project, the companies said that an IRIS FailSafe cluster running on Linux "will remove any single point of failure and allow applications to increase availability to the level required for mission-critical data center operations."

One month later, SuSe announced an agreement with Fujitsu Siemens Computers, Siemens Business Services and Siemens IT Service to deliver SuSe Linux-based systems with complete customer and sales support to the enterprise. SuSe Linux hailed it an important step toward guaranteeing 24-hour, 7-day-a-week Linux support for customers worldwide.

SuSe executives see huge growth potential for Linux-based systems throughout the government sector, especially in the United States. Already experimenting with such systems are parts of the Army and a couple of universities, said company officials, who declined to be more specific.

CompanyUnits% Market Share
Compaq Computer Corp.18,08825
IBM Corp.7,00110
Hewlett-Packard Co.5,4297
Dell Computer Co.5,1587
Fujitsu Siemens2,2863

Source: International Data Corp.

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