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Companies Form Group to Promote Linux

Computers: Action is a sign the free operating system may become a rival to Microsoft products.


SEATTLE — IBM Corp., Red Hat Inc. and 45 other companies formed a group to promote the Linux operating system in new appliances, wireless phones and other technology devices.

It's another sign of the growing demand for Linux, an alternative operating system that may eventually be a strong rival to Microsoft Corp. Although Windows still dominates the desktop computer market, rival operating systems such as Linux, Sun Microsystems Inc.'s Solaris and Novell Corp.'s Netware are becoming more widely used.

Plans of the Linux announcement emerged Thursday during a three-day conference in Palm Desert that ends today. Executives from Novell, Red Hat, Caldera Systems Inc., Intel Corp. and others are discussing how the operating system business has changed dramatically for smaller software firms used to living under Microsoft's shadow.

Various companies pledged about $100,000 to start the Embedded Linux Consortium, which seeks to broaden Linux's reach into microchips to be used in everything from microwave ovens and refrigerators to wireless phones and TV set-top boxes.

"In the Internet [age], everyone has a chance again," said Ken Anderson, vice president of information services for Novell. "The fact that Red Hat can now challenge Microsoft would have been considered ludicrous three years ago. This is a fundamental shift."

Linux is an open-source operating system, where computer programmers have access to its source code, and which can be downloaded free over the Internet. In the past year a wave of Linux-related companies, including Red Hat, have gone public. These companies provide related software, installation and other services for a fee.

Organizers of the System Builder Summit 2000 conference, a trade group for hundreds of small companies that build custom computers for businesses, invited Microsoft to attend the conference but the software giant declined, they said.

"There's an opportunity to create new technologies for the operating system," said Lisa Sullivan, director of sales for Red Hat, which uses Linux. "All of a sudden, operating systems are exciting again."

The emergence of the Internet, Microsoft's draining antitrust battle and the rise of Linux--all have reshaped the role of operating systems, experts say.

The Internet creates new business opportunities for operating systems that power the computer servers used in e-commerce. And the Net creates a demand for simpler operating systems that will power handheld computing devices, wireless phones, dedicated Internet devices and Internet appliances--the so-called PC-alternative market.

"There is an opportunity being driven by low-cost Internet devices," said Kevin Knox, research director for the GartnerGroup. That, combined with Microsoft's legal struggles, "gives more hope for these non-Microsoft competitors than they've ever had before."

To be sure, no one expects to challenge Microsoft's monopoly of the PC desktop market. The software giant will control 90% of that market five years from now, Knox said. But in the next three years, PC desktop sales are expected to flatten while sales for various Internet devices are expected to grow.

This boosts the fortunes for Microsoft rivals Novell and Caldera. "The Internet allowed the open-source concept of producing quality code to be introduced," said Benoy Tamang, vice president of marketing for Caldera Systems, which is selling Linux. "And Linux is going to redefine how businesses invest in information technology."

Even in the competitive server market, Linux has been growing at the expense of Windows NT and other Unix systems, according to International Data Corp. Last year, Linux took 25% of the server market, up from 17% in 1998.


Bloomberg News contributed to this story.

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