It's been a while since I touched on the Linux status in the computer industry. And lots of things are happening in this world. Both Larry Ellison, from Oracle Corporation, and Scott McNealy, from Sun Microsystems, gave keynote speeches at the last LinuxWorld show. Even Microsoft had a booth at the event. So it's time to revisit the Linux situation, with the help of FORTUNE.
Today Linux has become the hottest thing in corporate America since e-mail and maybe even Windows itself. Yes, most of the Linux IPOs are out of business or on the verge of going bust. Yes, few really believe Linux will ever replace Windows on the desktop. But on the back end, on servers in data centers rather than PCs on desktops, companies like Boeing, Amazon.com, E*Trade Financial, DreamWorks, Google, and virtually every major Wall Street firm have either finished reconfiguring big chunks of their servers to run Linux or are in the process of doing so. General Motors says it is likely to do the same in a year or so. Even the Chinese and German governments, along with about two dozen other countries, are taking a look at how they can save money by using Linux in their infrastructures.
This conversion is already causing reverberations throughout the high-tech world. For the year ended June 30, the number of servers sold with Linux as the operating system grew 18%, while those sold with Windows grew only 3% and those sold with Unix fell 7%, according to research group IDC. IBM says that contracts for its Linux integration and support services now number around 800, compared with 95 only 15 months ago. And Dell and HP say they will sell 15% to 18% of their servers this year with Linux preinstalled, up from less than 10% last year.
And even if it's still early into the conversion cycle, some companies are saving real money, and even gaining on the performance front, like DreamWorks.
The remarkable thing about Linux for Ed Leonard of DreamWorks is not how much money it saves him but how much faster it is. That is a big deal for his crew. Among other things, Leonard is in charge of technology for DreamWorks' giant animation business, makers of Shrek. Animation is one of the most processor-intensive applications in the computer industry, requiring complex images to be redrawn over and over. For years it was the province of workstation maker SGI. But, having converted to Linux about 18 months ago, Leonard says his systems are generating ten times the performance for a third of the cost. Converting to Linux has boosted productivity in another interesting way: "It allows animators to work at home," says Leonard. That wasn't possible when every machine cost $30,000. But anyone can afford a PC running Linux.
After telling us about some of these success stories, Fred Vogelstein looks at companies threatened by Linux emergence, like Microsoft or Sun. If you want to know about their strategies, you'll have to read the whole article.
Source: Fred Vogelstein, FORTUNE, September 30, 2002
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