IBM Jumps on the Linux Bandwagon with Both Feet, Sort Of

  • Written By: R. Krause
  • Published: January 28 2000

Event Summary

January 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 of ESD.

In 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.

It 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 OSes.

Palmisano 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."

Market Impact

This 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.

IBM's 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 Solaris.

User Recommendations

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.

Customers 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 standard.

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