The advantages of the free Linux operating system are
clear. But will financial institutions overcome its perceived lack
of support and embrace the new IT culture it heralds?
Barbara Gengler of Edittech International
investigates
Support for the Linux operating system (OS) is gaining momentum
and it is finally being treated as a serious alternative to Windows
and the Unix varieties. By some accounts, the operating system has
between 7 million and 10 million users inside businesses. Some
market researchers dispute the accuracy of the figures, saying they
represent downloads, not actual deployments. Yet major vendors are
beginning to offer Linux on hardware platforms as well as Linux
compatible applications.
Linux is the brainchild of Linus Torvalds, who created it as a
hobby while a student at the University of Helsinki in 1991. In
collaboration with fellow code hackers from around the world,
Torvalds introduced Linux 1.0 in 1994 and gave it away over the
internet, the idea being to create a freely available OS offering a
viable alternative to the Windows/proprietary Unix hegemony.
Companies like Red Hat, Caldera, SuSE and others can sell
different versions of Linux but under the licensing agreement they
must make the source code available and remain true to Torvalds’
original vision.
Today, Linux is primarily used as a networking system. It
handles basic functions like file and print, launches software
programs and allows computers to talk to the main server in a
network. As it is highly resource efficient and free Linux enables
small companies with comparatively old hardware and limited funds
to build Web servers and construct networks.
Large companies are also attracted. America Online, Cisco
Systems and even the US Postal Service use Linux for certain
database, tracking and Web serving functions.
‘Linux is inexpensive to acquire, can be purchased from multiple
sources, has a growing number of applications, is endorsed by the
industry’s major technology players, has ready sources of technical
support and is preferred by technology managers around the world,’
says Linda Musthaler, vice-president of technology consulting firm
Currid & Company.
She points out that the general acceptance of Linux is a chicken
and egg situation. More companies would choose Linux to host their
business applications if the independent software vendors (ISVs)
would port their software programs to the Linux platform. And the
ISVs would port their software if they knew that more companies
would buy the Linux version to host their business
applications.
Some leading software companies, such as Oracle and Corel,
already have taken the plunge to deliver their commercial software
applications on Linux. ‘With big name ISVs now in the Linux camp,
many smaller ISVs are sure to follow,’ Musthaler says.
It is also the case that major vendors are beginning to offer
Linux enabled products. IBM will support Linux on its Netfinity
Intel-based range of servers, its PC 3000 commercial desktops,
Intellistation workstations and Thinkpad laptops. A Linux support
service is also being added to its services line.
Nick Davis, IBM server strategist, says: ‘Linux is the platform
for most of the creative work coming from young and undergraduate
programmers right now and it is therefore possible that the next
killer application will be written for Linux. Also, as Linux is
Unix-based its emergence may reinvigorate development in Unix,
ensuring that Unix continues to exist as a viable alternative to
Windows in the long term. Prior to Linux, young programmers were
being indoctrinated into the Microsoft platforms. This development
simply means that competition will remain strong.’
Hewlett-Packard (HP), meanwhile, has signed an agreement with
commercial Linux distributor and developer Red Hat to offer Linux
on its NetServer product line. Hugh Jenkins of HP says: ‘Initially
our Linux enabled products will be targeted at the education and
internet service provider (ISP) sectors, to which the economics and
adaptability of Linux appeal. Similarly, the slightly rebellious
culture from which Linux emerged appeals to these sectors.’ Jenkins
says the factor preventing corporate and institutional take-up of
Linux has been lack of support, a factor that major vendor support
should help to overcome.
‘As yet HP has had no interest from the financial services but
Linux is at a very early stage in its commercial development. HP
has got involved because we feel that it is better in this business
to be proactive, though it has to be said that Linux is not setting
the sales figures alight as yet,’ says Jenkins. However, he notes
that HP’s involvement in Linux is not as precipitate as it might
seem. ‘It is estimated that Linux has between seven and ten per
cent of the platform market, although this sounds a bit high to me.
Nevertheless the appeal of a new pricing structure and the
diversity of its nature will generate business.’
Demonstrating the interest from ISPs, Netscape is also
supporting Linux. ‘More and more of our customers are using Linux
alongside their other systems,’ says Netscape vice-president Tim
Howes. ‘Our customers are starting to demand more support from us
and we want to give it to them.’
Perhaps unsurprisingly the Compaq/Microsoft
axis is not yet as enthusiastic. Roger Issott, finance industry
marketing manager for Compaq in the UK, says: ‘Compaq has so far
adopted a watching brief with regard to Linux in the financial
services. I simply do not see why my financial services customers
would want to use it for anything critical. There is no such thing
as a free lunch and the reliability, scaleability, portability and
security of Linux have yet to be tested. In addition, developing an
OS by global committee does not bode well for an integrated final
product.’ Richard Horsfield, Microsoft industry manager for
financial services, agrees: ‘It is difficult to see a business case
for Linux at a time when NT sales are outstripping those of Unix in
this sector. There are not enough Linux applications out there and
there is nowhere near enough adequate support in place.’
Iain Stevens, software product marketing manager for Compaq,
says: ‘While everybody is beginning to offer support this in fact
takes the form of certification rather than complete service.’
Stevens agrees with the notion that Compaq is watching developments
but adds: ‘We are shipping a range of OS neutral Alphaservers on
which Linux is being used. In fact I have just had my first enquiry
from a major bank about the suitability of our products for Linux,
although everyone who has asked about it is keeping it very low key
right now.’
Nevertheless, Linux is present in the IT
landscape of several financial institutions, although only as a
minor feature. Tim Goldberg, managing director of Swallow Business
Systems, a wholly owned subsidiary of Bank of America which
produces treasury management systems, says: ‘Linux is running on
one of our 50 servers where it has been functioning as a file
server for around six months. So far we are happy with its
stability and performance.’ Goldberg definitely sees a role for
Linux, a role that may well grow as the operating system evolves.
‘Linux represents a significant alternative to Windows NT and Unix,
especially for file and database servers. We trialled Linux as a
Sybase database server and it was fine, though it did not offer a
significant advantage over NT. For file server operations, however,
it is excellent. In particular, it is light on resources when
compared to NT.’
Though generally enthusiastic about Linux, Goldberg has some
reservations about its mass market potential as it exists now.
‘Linux represents something new in the OS marketplace. Unix has not
really had the commercial uptake that it perhaps should have had
because of the variety of proprietary flavours it comes in when
compared to NT. Linux has the advantage of variation but the fact
that its source code is open and free means that anyone can fix any
problems that do occur inhouse. It is the user interface,
essentially still line entry, that prevents it becoming a mass
market product. When a fully functional graphical user interface
arrives the corporate market may well begin to use it
seriously.’
Goldberg says the fact that Linux is free is heavily in its
favour, pointing out that while this does not make much difference
if Linux is only running one server, on 50 or more the savings are
considerable. ‘Right now it is too early to commit resources to
Linux but we have had requests, especially from Asia where they are
more than usually aware of Linux, to use the OS as a front end. We
do not feel that it is developed enough yet, however.’
A major European bank, which, true to form when it comes to
Linux, was unwilling to be named, says: ‘We use Linux for some test
servers and a few production servers but there is no large scale
use planned. However, it is a solid OS and vendor/industry support
is good. It is very promising for low cost black box type servers
that can be quickly & cheaply deployed. We keep up with
progress on Linux and we are very aware of its capabilities.’
Linux is also resident on an email server at Home Savings of
America, a savings bank based in Irwindale, California, recently
acquired by Seattle-based Washington Mutual. Linux has performed so
well that there is little thought given to Windows NT, Rick Snyder,
a senior systems consultant at the bank, recently told a US
newspaper. ‘Why would you go anyplace else?’
Similarly, a US financial services company, which has asked to
remain nameless, has Linux installed in its Virginia headquarters.
The organisation of about 5000 employees specialises in funding
higher education. ‘I found it more stable and helpful even though
there have been good and bad things,’ says David Niemi, a network
manager.
He adds that Linux is easier to support than Windows. ‘And there
is no risk of some large company who controls the operating system
unlevelling the playing field.’ Niemi uses Linux for office
productivity software and network management as well as an email
server.
However, the continuing uncertainty surrounding Linux is
emphasised by UK telephone bank First Direct. While it is aware of
the changing attitude towards Linux, it has no plans at the moment
to implement it. ‘We are considering evaluating it, but a major
concern is that there is no support system for it at present,’ a
spokesperson explains.
Until recently online fora and user groups were the only source
for support queries, but support for Linux is the idea behind
Silicon Valley start-up LinuxCare, which kicked off its service in
March. ‘We saw the need for Linux support and are attempting to
meet that need,’ says Bryan Abshier, a technical engineer at
LinuxCare.
The company’s call centre support will initially be available in
North America, but, Abshier adds, its current plans are to offer
worldwide telephone support for Linux. The company is Partnering
with distributors such as Red Hat, Caldera and SuSE.
Included in the coverage will be support for English language
versions of Caldera, Debian, Pacific HiTech, Red Hat, SuSE and
Slackware distributions. This includes configuration information
and customisation but does not cover changes to source code made by
users. For example, if a user wants to configure the kernel,
LinuxCare will work with it to get the configuration right.
However, LinuxCare cannot make guarantees if the user has written
its own device driver or has modified source code. LinuxCare says
most incidents are resolved in fewer than three days.
Silicon Graphics (SGI) has also announced that it will provide
support for Linux. Beau Vrolyk, senior vice-president of the
computer systems division at SGI, says few operating systems have
garnered the backing that Linux has in as brief a time. ‘There is
something of an avalanche going on here,’ he says. The new version
of the Linux kernel adds support for Silicon Graphics’ new
Intel-based Visual Workstations.
Linux resellers are bolstering customer service offerings to
provide the round the clock support that large corporations have
come to expect from technology providers. Server software from
Pacific Hi-Tech, the leading Linux seller in Japan, will come with
features that large corporate customers want. The soon to be
announced Enterprise Server Edition will come with database
software from Oracle, email software from Sendmail and back-up
software from Enhanced Storage Technologies, according to the
company. It will also introduce a free package called the Server
Edition that will be more tightly configured to provide server
features such as Web page delivery, email and Windows file sharing.
Technical support will take the form of annual subscriptions, with
companies able to choose from a menu the software they need
supported.
Pacific HighTech is not the only Linux distributor aiming
squarely for the corporate market. SuSE, Red Hat and Caldera have
also been beefing up their service offerings with 24 hour a day,
seven day a week technical support. The main beneficiary of
interest in Linux so far has been Red Hat, which according to some
analysts holds an estimated 50 per cent of the market for
commercial versions of the operating system.
‘Red Hat offers a viable service plan and support from Intel
certainly gives them added credibility with companies and corporate
users,’ says Rob Enderle, a senior industry analyst at Giga
Information Systems. He adds that this credibility is spurring a
growing class of technically sophisticated users into at least
considering the operating system.
‘Giving away the technology for free builds business for the
services you can offer with that technology,’ says Bob Young, Red
Hat’s president and CEO. ‘The benefit of having your operating
system freely available is that you have control over the system
itself. It allows you and others to build applications that are
more reliable and that creates more demand.’
Linux offers users some benefits that other operating systems do
not, says Dan Kusnetzky, an analyst at IDC. ‘It still requires a
fair amount of technical expertise to use. For something like
internet service providers or developers of very specialised
software, the fact that they have access directly to the source
code is a significant benefit. If you are a reseller developing
your own software, it can also add $3000 or $4000 to your bottom
line if the alternative is paying for a licence from Microsoft or
one of the Unix vendors,’ he says.
Emphasising the potential range of the OS, European Linux vendor
SuSE has unveiled Linux cluster computer systems under the banner
SuSE Advanced Linux Technology. The clustering technology, which
enables users to set up a group of parallel Linux systems, became
available in March 1999 in Europe and will later be available in
the US. Linux is growing fast, but there are still psychological
and technological barriers to be overcome if the OS is to penetrate
the corporate market. While education and word of mouth will
undoubtedly overcome the lack of awareness of support services, the
concept of rolling out an OS that enables inhouse IT departments to
gain complete control of all aspects of an institution’s IT
infrastructure is one that business managers may prove slow to
appreciate.
Perhaps unsurprisingly the Compaq/Microsoft
Nevertheless, Linux is present in the IT