Open-source for business

Despite the legal uncertainties affecting Linux, open-source software development and use is growing in the enterprise community, even in mission-critical environments and business sectors.

One of the more unlikely developments in the software industry during the last few years has been the rapid uptake of Linux in the financial services sector.

Most of the Linux deployments in this sector have been for non-trivial data-intensive applications on blade servers, and are at the core of investment bank operations.

We shouldn't be surprised. Several leading players, most notably Intel, HP, IBM and Oracle, have been pushing Linux as a cheaper, more flexible alternative to Unix. The ISVs have followed suit. The financial services sector depends on compute power, and Linux on blade servers is both cheaper and more scalable than the alternatives.

The main driver for Linux adoption has been price/performance. Lehman Brothers moved to Linux after losing a thousand servers in the attack on the World Trade Centre, claiming "a 50 per cent improvement in cost and about a 20 per cent improvement in performance", and Morgan Stanley claimed to have achieved a 13-fold increase in performance after switching its equity options calculator from Solaris to Linux in November 2001.

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In this sector Linux has become the first choice for numerically intense computing for "equities, derivatives, risk analysis, and foreign exchange positioning" and, according to Ian Dent, HP's Linux business manager, many of the finance houses "have now accelerated adoption far beyond the initial application point for which Linux was adopted". Italian financial institution Banca Popolare di Milano, for instance, has replaced Unix and Windows with consolidated Red Hat Linux servers and thin client desktops throughout the organisation, from the data centre to the branch.

Extending the reach of open-source

Dresdner Kleinwort Wasserstein, for instance, has released the code for its Open Adaptor Java-based software development toolkit, and other investment banks and individuals are now participating in the project's development, an unusual example of collaboration among financial institutions.

To a large degree the success of Linux has been led by the computer hardware manufacturers. Organisations such as SGI, Intel, HP, Novell, Sun and IBM have not only contributed software under the GNU General Public License (GPL) and its variants, but have also actively participated in free software projects for their own benefit. Sun Microsystems, for example, has just released much of its Java source code under the GPL, and for several years has donated code and personnel to the development of OpenOffice, Firefox and Gnome, which have been deployed on its Linux and Solaris offerings.

In the wake of the Java announcement, Jonathan Schwartz, Sun's chief executive, has also hinted that Solaris might be a candidate for future release under the GPL, which, if true, may provide an interesting competitive spur for the future development of Linux.

Supporting open-source systems

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Paradoxically, this willingness to collaborate encourages innovation in other aspects of the business. A new device can be brought to market much more quickly because the operating system is already there - and the organisations that have come together to support the development of the software have benefited as a result. Most of the lead developers on free software projects are employed by these companies to work on their own chosen projects.

As Adam Jollans, IBM's worldwide open-source and Linux marketing strategy Manager, puts it. "We are not doing this just for altruistic reasons. We are doing this because we see a lot of energy and innovation in open-source communities, collaborative innovation between companies, universities, and bright individuals, and that is something that wasn't easily possible ten years ago, that the Internet has made possible."

For the enterprise customer, open-source software has brought other benefits, price/performance, freedom from vendor lock-in, adherence to open standards, and an operating system that scales from the smallest ARM processor to the mainframe. Jollans says that IBM is continuing to see "increasing momentum in the Linux market, and increasing customer adoption in its use for mission critical applications, which is triggering a lot of interesting things in the marketplace. There's a realisation in business and government that there is going to be a mixed solution for the foreseeable future, and that people are going to mix open source applications and middleware with private source applications and middleware, and choose their applications according to what fits best according to price and function. The meeting point is open standards and open architecture."

A few short years ago Linux sat at the edge of the organisation, running print, file, web and DNS servers, but the exception now is the enterprise that doesn't have a Linux strategy. This is especially true of organisations with a requirement for heavy processing power. 376 of the world's top 500 supercomputers are running Linux. According to IDC, the Linux server market experienced "fifteen consecutive quarters of double-digit, year-over-year revenue growth" between 2002 and the last quarter. "Linux servers now represent 12 per cent of all server revenue, up slightly from the second quarter of 2005" and these figures make no allowance for the countless in-house installations of Linux which are supported internally and go unrecorded.

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Open-source applications

Open-source is leading the way in several key areas of software deployment, notably virtualisation, which allows the enterprise to fully exploit the processing power of its servers, and Service Oriented Architecture (SOA). JBoss, the J2EE application server, has had over 10m downloads and is making deep inroads into the enterprise market which was previously dominated by BEA and IBM.

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Although JBoss and other open-source solutions, such as Compiere, an enterprise level ERP and CRM suite, are freely downloadable, most organisations prefer to arrange support and maintenance contracts with the parent companies. Some companies, such as Barclays Global Investors and Dresdner Kleinwort Wasserstein, have even adopted open-source collaborative methodologies and tools for their in-house software development.

New technologies and cost savings

Linux is most widely used these days for application and database servers, but according to Jollans: "there are also interesting developments on the desktop, based around Eclipse," the open source Java development tool for cross-platform GUI applications. As a proof of concept IBM have ported non-trivial applications of Lotus Notes and Lotus Sametime using Eclipse, "which opens the way for serious business applications to be entirely portable between Linux and Windows."

The biggest hindrance to the adoption of the Linux desktop has been the shortage of native applications, despite the support of the many ISVs with certified applications on Novell SUSE and Red Hat. Jollans notes that the first consideration of an ISV in supporting another platform is: "What is the incremental cost? What is the incremental opportunity? Eclipse removes the roadblock."

Jollans believes that the imminent release of Vista, and the availability of Eclipse present an opportunity for Linux to take off on the desktop. Linux has already arrived on the desktop in certain sectors, for call centres, for retail outlets and developer workstations, and there has been steady uptake in the public sector throughout Europe, "but if you get more market share you get more applications," he says, "and if you get more applications you get more market share."

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