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Server Wars: Battle Rages for the Next Big Prize

No longer just the little guy, the Linux operating system is second only to Microsoft in installations and has support from major technology firms.


The little Scandinavian operating system that could isn't so little anymore.

According to a February report from International Data Corp., Linux accounts for 27% of the installed base of server operating systems, second only to Microsoft's 41% share. Furthermore, the 24% growth rate in Linux shipments is greater than Microsoft's own 20% boost in Windows servers.

That success comes as a surprise to some. In the mid-1990s, Linux was slammed as too weak to support anything but small, simple tasks. In the late 1990s, critics said that although Linux was ready for mid-size companies, it wasn't appropriate for a large enterprise.

However, with significant support from technology providers such as IBM Corp., Dell Computer Corp. and Compaq Computer Corp., and from top business software packages such as Oracle's 11i enterprise application suite and SAP R/3, Linux appears ready to carve out a bigger share of the market.

"I think it's fair to say that virtually every one of the Fortune 500 or Fortune 1000 is experimenting with Linux or open source [software] in some way," said Larry Augustin, chief executive of Fremont, Calif.-based system vendor VA Linux.

In his view, the slew of dot-com companies that turned to Linux for an expedient and inexpensive technology backbone set the table for adoption among larger firms.

"They were much more willing to go with younger technology," Augustin said. "Large companies are going to be much more cautious in where they go. It takes time for a technology to move its way in there."

Linux is open source--the code that makes up the core of the operating system is freely available to anyone who wants it--and companies typically pay very little, if anything, per computer to install it. But some critics have scoffed at the notion that this is a major selling strength, claiming that Linux adopters don't really save much money because commercial operating systems don't account for a significant portion of information technology costs.

Dick Sullivan, IBM's vice president of software solutions and integration marketing, said this misses the point.

"It's not just that the [operating system] itself is inexpensive, but the real estate it requires from a server standpoint is also smaller than the other operating systems that are available."

That savings also translates downstream to the consumer and wireless devices Linux developers hope to infiltrate over the next couple of years, where saving money on extra RAM or a faster central processing unit can mean a lower price and a more attractive product on the store shelf.

Linux has worked its way into a number of reference designs and prototypes for hand-held devices, including a Dick Tracy-esque power wristwatch that IBM researchers displayed last year. Several companies have displayed Linux solutions that run on Windows CE devices such as the Compaq iPaq, and start-up Agenda Computing is putting the finishing touches on its VR3 palm-size Linux computer. The new chief of Hewlett-Packard's embedded and personal systems group recently discussed the possibility of moving his company's hand-held products to Linux as well.

For now, Linux is found mainly in data centers and server racks. Nate Jones, who launched Newlin Technology Consultants last summer in Lombard, Ill., based his own business technology infrastructure on Linux out of familiarity and necessity.

"For me to go out and spend an additional couple of thousand on software just wasn't possible," he said. So he and his staff converted custom-built PCs into servers running the Linux-Mandrake edition of the operating system. Linux has served the company since, including as a file and print server for the Windows desktops in his office.

Cleverly named firms such as Eazel (founded by some of the original Apple Macintosh designers) and Ximian (a commercial offshoot of the Gnome open-source graphical desktop project) have emerged to make Linux easier for everyday desktop users.

However, despite their efforts to create more intuitive applications and launch Internet-based automatic maintenance and program-updating services, Linux just isn't catching on.

The same IDC report indicates that Linux has just 1% of the desktop market, far short of even Apple's operating system. Furthering the gloom is the fact that Orem, Utah-based Caldera Systems Inc. has decided to pull its Linux products from retail sale, and Corel Corp., which had staked much of its reputation on its own brand of Linux, plans to spin off that product line to a Linux investment firm.

Augustin says the problem is a lack of mainstream applications.

"People don't run Windows because they love Windows. They run it because it does a pretty good job of running Microsoft Office and the games they love," he said.

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