10, 2000 12:30 PM ET - IBM is refocusing its corporate-wide Internet software
efforts around Linux, a move it hopes will legitimize the open-source movement
for large corporations while reviving its own flagging enterprise server business.
In the process, IBM has dismantled the four-year-old Internet Division and has
established a new Linux group under the Enterprise Server Division. The new
group will be headed by former Internet division executive Irving Wladawsky-Berger,
who will report to Sam Palmisano, senior vice president and group executive
an interview Monday, Palmisano said that the open standards of Linux represent
the same opportunity the Internet did. "We've been thinking about this for a
while," he said. "Linux is an evolving, high-growth [market] and we wanted to
get there quickly in the early adoption phase."
IBM will "Linux-enable" all of its hardware platforms as well as port applications
and middleware to Linux. In addition, it will work closely with the open-source
community to develop and promote standards and make certain of its technologies
available as open source. Palmisano said he believes large corporate customers
will consolidate their operating systems around Windows NT, Unix and a proprietary
system like MVS. "Our vision is that we can create a flexible environment in
Unix," he said.
IBM has also been a very vocal proponent of Windows 2000, which is due next
month. It has spent millions of dollars porting applications and middleware
to NT, making its hardware compliant and readying service programs for customers
doing large-scale migrations.
is also in the midst of jointly developing Monterey, a Unix OS that will run
on Intel Corp. and RISC processors and, eventually, eclipse AIX. It remains
relatively unclear how IBM will position Linux in relation to these forthcoming
described the Linux focus as "a long-term play" in which IBM is not likely to
see any bottom-line impact for several quarters. However, he is confident that
an early and strong start will give it an edge over rivals as well as give customers
what they want. "Customers want a flexible platform that's not proprietary,"
he said. "It's not a political movement. This is a cultural movement."
gives Linux another shot in the arm, as another major hardware vendor gets behind
it. Fortress Microsoft is slowly getting chipped away, especially in the server
arena. This announcement will help accelerate Linux's growth. After doubling
its percentage of server shipments from 1998 to 1999, Linux is now looked on
as a real player, not just a "not-Microsoft" alternative. Despite this growth,
we do not believe Microsoft is in any great danger from this announcement alone.
However, present indications are that Windows 2000 (Win2K) will have a slower-than-originally-expected
adoption rate (matching its slower-than-originally-expected development) - a
combination of this with Linux's market increase may spell real trouble for
Redmond with the next 18 months.
present support of four of the big Linux vendors (Caldera, Red Hat, SuSE, TurboLinux)
indicates Linux has become strategic, as opposed to a "point solution". Porting
applications to Linux is obviously a big step. Linux is not presently a "standard
option" on Netfinity servers, but we expect IBM to change that status within
6-9 months. Once that happens, they will return to a position of being able
to offer a computer for all environments - Windows, Unix, Linux, AS/400 - except
We are disappointed that the announcement did not include IBM making Linux available
as an orderable option on Netfinity servers. This is a long-term play for IBM.
"Linux-enabled" does not mean IBM is shipping servers running Linux, only that
IBM supports it. This puts IBM at a disadvantage relative to Dell in the Intel-based
server market. An additional caveat is that IBM will need to ship a few thousand
servers with Linux before its support people overcome learning curve issues.
Unless customers have in-house Linux support capabilities, they should sit tight
until IBM's learning curve issues are successfully overcome.
wanting to buy Linux-based servers from IBM should wait until Linux is more
easily orderable. Even if a Netfinity is purchased and Linux installed, some
caution should be used, as IBM is not yet fully supporting all of the named
brands on all of its servers. With IBM's commitment to Linux as a strategic
operating system, we expect this situation to be remedied within six months.
Customers making a commitment to Linux should not drop IBM from consideration,
even though they may have to wait. Customers who can't wait should consider
Dell - the only vendor of the "Big Four" Intel server vendors to ship Linux