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Linux: When Free Isn’t

Linux may be open source software, but does that mean you don't have to pay for it?

High tech is not an arena rich in historical irony, but it has its moments. One came last year, when Microsoft CEO Steve Ballmer told analysts that Linux, the (potentially) free software that continues to attract the interest of business customers, has “the characteristics of Communism that people love so very, very much about it.” At roughly the same time, IBM, a company generally not known for its Marxist worldview, threw its considerable weight behind Linux, dedicating $1 billion to the software’s development and pledging to invest more than $300 million in Linux services during the next three years. And defense witnesses in Microsoft’s recent antitrust trial continually cited Linux as evidence of a robust, competitive marketplace–hardly a Communist ideal. (For the record, wasn’t it Microsoft’s distribution of free copies of Internet Explorer that sparked cries of market abuse in the first place?)

No less ironic is that IBM, the company credited with inventing and using FUD (fear, uncertainty, and doubt) as a means of fending off the threat of new technology, may help dissolve the FUD that Microsoft and other firms have thrown around Linux, the operating system software that can be downloaded for free from various Internet sites. Linux may not carry the high price tag of other operating systems, but IBM’s embrace is purely pragmatic. As Linux gains wider acceptance, it creates a growing market for hardware and services. IBM, therefore, not only trumpets the availability of its own Linux-ready hardware, but also makes frequent mention of the growing number of software applications that can run on Linux machines. In June, the company counted 2,300 such applications–an increase of 30 percent from just three months earlier. “A mature operating system would have 10,000 applications,” admits Daniel D. Frye, director of IBM’s Linux Technology Center, in Beaverton, Oregon, but those that are available, he notes, “are the big ones–like SAP and Lotus Notes.”

A Question of Support

Linux has been lurking “around the edge of the enterprise” for years, notes Frye, handling file serving, messaging, and other IT plumbing jobs. But now it is moving into the mainstream applications that run Corporate America, and its overall market presence continues to grow.

As Linux becomes a viable platform for business applications, one key question for finance executives is whether a system praised for being free will exact a high price in the form of service and support. Computer geeks may be thrilled by the communal spirit of collaboration in the Linux world, but once a company has placed a crucial application, such as ERP (enterprise resource planning), on the Linux platform, decisions about how or whether to acquire adequate service and technical support become an important element of corporate risk management.

Microsoft, in fact, recently underscored the importance of support by using it as something of a stick to force corporate customers to enroll in ongoing maintenance contracts. Linux enthusiasts point out that open-source software offers relief from that sort of arm-twisting. But it does create a situation ripe for the marketing talents of IBM and other companies (Linux distributors Red Hat, Caldera, Mandrake, TurboLinux, and SuSE among them) that are eager to convince Corporate America that the combination of free software and paid support makes sense.

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