IBM Pushes Linux into Appliances

  • Written By: R. Krause
  • Published: February 14 2000

Event Summary

January 31, 2000 [Reuters] - IBM Corp said its line of network computer terminals can now run on the alternative software system Linux, in the latest move by the world's largest computer maker to make its products more flexible and easier to use on the Internet.

IBM (NYSE: IBM), the computer maker that so far has made the broadest commitment to Linux, also said it would post instructions on its Web site for configuring Linux, and a forum for customers to share information about using Linux on IBM hardware.

"We are definitely embracing Linux where it makes sense," said Irving Wladawsky-Berger, vice president of technology and strategy for IBM's enterprise systems unit. "We're working with the Linux community to make it a better operating system."

The "thin-client" IBM Network Station Series 2200 and 2800 expands a family of Linux-certified IBM computers, including its ThinkPad notebooks, IntelliStation workstations, and Netfinity PC servers, that IBM has made ready to run on Linux software.

IBM, the world's largest supplier of computer hardware, software and services, said this earlier this month that it was moving to make all of its servers Linux-enabled.

Market Impact

IBM joins the chorus of manufacturers pushing Linux onto appliances. As previously discussed, Linux is a natural for these appliances, which are usually low-cost. IBM already has a good-sized installed base of Network Stations (NS), but this move is targeted beyond that. This is a business-focused (vs. consumer-focused) product. This is also part of a bigger push by IBM into the thin-client market, upgrading their current NS 300 and 1000 products.

We believe the availability of Linux appliances will help grow the appliance markets, especially if there are cost benefits to having a "free" OS installed. By some estimates, appliances will outsell PCs within 3-5 years; this growth should be helped by the lower prices expected for Linux-based (vs. Windows-based) machines.

User Recommendations

Business users committed to Linux may want to consider Network Stations as part of a larger, corporate-wide infrastructure revamping. While having thin clients on everyone's desktop may be the desired infrastructure model, we do not see a Linux-based Network Station as a sufficiently large "draw" to drive the order.

For customers who eschew Linux, this announcement has no value, and should be ignored. One item of interest: Presently, IBM is pricing the Linux and non-Linux Network Stations the same.

At a base price of $679 for the 2200, and around $850 for the 2800, this is hardly a price tag that will make a non-business consumer salivate. For an additional $20 (i.e. $699), a consumer can get a Dell WebPC with a hard drive, more RAM, a monitor, and some software applications pre-loaded. OK, the WebPC doesn't come with Linux - but as they say back home, who cares? For the corporate market, non-Linux users may find Compaq's iPaq a better value. Whether corporate or consumer, competitive analysis should be done.

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