New Broom Sweeps Clean
Among the early industry adopters of Linux in financial services was E*TRADE (Menlo Park, Calif.; $26 billion in assets), which had previously used hardware from Sun Microsystems running Solaris, Sun's implementation of Unix. "They swept the floor of all their Sun boxes, and went to Linux on an x86 [IBM x-Series] platform," says Victor Spigelman, Linux solutions executive, global banking industry, IBM. "They totally wiped out their Solaris implementation."
By the late 1990s, Linux had become significantly more portable, with the ability to run not just on Intel-standard PCs, but also on new chipsets, mainframes and embedded devices. The link between operating systems and hardware was finally broken wide open. When Merrill Lynch (New York; $495 billion in assets) adopted Linux in 2002, it went for IBM's zSeries mainframe instead of the x86 platform.
Also, Linux has become sturdier over time. "A couple of years ago, the standardization and system management was a little weak on the Linux side," says Spigelman. "With the [Linux version] 2.6 kernel, we're starting to see things like [telecom] carrier-grade Linux, and an industrial-strength version of an operating system."
Now, IBM (Armonk, N.Y.) released a low-end server designed expressly to run Linux on Power Architecture, an open chip design developed by IBM, Apple Computer (Cupertino, Calif.) and Motorola (Schaumburg, Ill.). Returning the favor, Linux can take advantage of the specific features of the chip. "As Linux and its capabilities continue to evolve into the mainstream, we've got the platform that will allow that transition to happen quickly," says Dwight Tausz, business development executive for IBM's Linux on POWER initiative.
Overall, IBM has thrown its considerable weight behind the operating system and now sells about 50 percent of its solutions on Linux platforms, according to Tom Swett, global general manager, IBM Financial Markets. "We've demonstrated that the cost of computing with Linux is going to be more efficient in a number of ways," he says.
Along with less-expensive hardware, the obvious savings with Linux come from cost avoidance. "I don't think that anyone disputes that the initial acquisition and licensing costs for Linux are aggressively lower," says Bill Weinberg, open source architecture specialist for Open Source Development Labs (OSDL; Beaverton, Ore.). "You do end up paying for packaging and value-add by a given distribution supplier, but it's still significantly lower for the initial licensing cost than a proprietary operating system like Windows or Solaris."
But licensing costs aren't everything, as the proponents of Windows and Solaris are quick to point out.