Dozing off after a heavy lunch, it's easy to sink into a nightmare where a new operating system is taking hold. It runs on a 386 PC, so the latest hardware might never be sold again. The system hardly ever crashes, so support revenues are minimal, and it doesn't go through a must-have revamp every two years, cutting out the need for upgrade sales. It was developed by a vast committee of bearded lefties, many of whom hate commercial software vendors. Worst of all, it's given away for free.
Waking up in a sweat, it dawns that it's all true. The operating system is called Linux, a variant of Unix developed as open source - read free - software since the early 90s. The world's fastest-growing operating system, Linux already runs more than half the planet's web servers and is used by just about every notable corporation.
Compared with Windows NT, Linux seems to win hands down, according to Andy Butler, research director for Unix and mid-range server strategies at Gartner Group Europe. "Firstly, there's resilience. Linux is inherently reliable, certainly more so than Windows NT 4," he claims.
GB Direct, an internet consultancy in Leeds, switched to Linux in July last year and has suffered only one crash since. Mike Banahan, managing director of GB Direct, says: "Typical uptime for our web server is about 150 days. We were lucky if Windows didn't crash once a day."
Windows and DOS are designed for users to tinker with; Unix isn't. Eddie Bleasdale, director of ebusiness association Netproject, says: "Linux is very secure. There aren't any viruses around, and if there were, they wouldn't do anything like as much harm because Linux won't let them damage system files or the files of other users."
Then there are hardware resources. "Linux will run on a 386 PC with 4Mb of RAM," says Banahan. "A machine with 128Mb is considered awesome." With no operating-system licence to pay for, this means a fully-featured PC could be sold at a profit for less than £300.
The development model means that Linux is probably the most open operating system available, and because users are given access to the source code, it's almost infinitely tweakable. Basic skills are fairly abundant due to the system's preponderance in schools and universities. Comparisons with NT in performance have proved inconclusive, but Linux doesn't seem to perform any worse.
And there's the price - or lack of it. Gartner has calculated the cost of server software for a 100-user Windows NT network at about $21,000.
With Linux, the equivalent is $268. The failure to threaten Microsoft's dominance in the PC network market has partly been ascribed to its cost.
Users can now have Unix for less.
Substantial supply of Linux is still rare and is usually in cost-conscious segments such as education and the public sector, ISPs and telcos, and among specialist technical users. ISP Freeserve runs its entire operation on Linux. Powys County Council saved 90 percent on the cost of providing internet access to schools with Linux; Oxford University cut the number of administrators needed for its student email system from 15 to one part-time staffer.
Linux has been deployed even in the world of sport. IBM used the system to collect results on-court at the Wimbledon tennis tournament this year.
Resource-strapped nations in the developing world and East European countries are burgeoning markets for the system, but Linux is also proving very popular in Western Europe, especially Germany, France, Belgium and Scandinavia.
Most corporate IT directors have barely tested the water, but beneath the surface Linux is weaving its way into many organisations without the top brass even being aware of it - just as PCs and LANs did in the 80s.
Adam Jollans, European Linux software marketing manager at IBM, says: "Our research found that many chief information officers don't know how much Linux they have because it's been installed in departments, on web servers and on existing hardware."
The most popular applications are web servers, file, print and fax servers and so-called appliance servers - devices for one specific task, such as firewall or FTP server. As it becomes established, Linux will probably appeal most to smaller businesses and the public sector because of its low cost and high stability, and to anyone running ecommerce applications.
For specialist jobs, it could prove to be very popular, but big-time success may elude it.
Dataquest estimates that by 2003, Linux will account for a quarter of worldwide appliance server revenue, but only 3.4 percent of traditional server revenue. Gartner estimates that the Linux server market will be worth almost $2bn by 2003, although Windows NT sales will also more than double. And few observers see Linux as a serious threat to Microsoft, even on the server, where it is likely to do better.
On the desktop, Linux suffers from a lack of applications of the calibre of Microsoft Office. Iain Stephen, server marketing manager at Compaq, says: "If Microsoft put Office on Linux, it might make a serious impression on the desktop. Otherwise, it will only be a desktop environment for enthusiasts and Microsoft-haters."
Against paid-for, commercial versions of Unix, such as SCO, AIX, HP-UX and Solaris, Linux loses most of its advantages, except its low cost and proximity to the PC platform. Although it fares well compared with Windows NT, it loses out to commercial Unix in top-end and middleware, for example in fault-tolerance, failover, load-balancing, multi-processor support and journalling file systems.
Much depends on the availability of substantial software applications.
Several high-profile vendors have ported their products. But for corporates, the problem is that Linux has no track record, according to Jamie Snowdon, research manager at research company IDC. "Linux is still unknown.
Until it is tested as thoroughly as the commercial versions of Unix, its stability won't be proved," he says.
Butler says: "To see real benefits, you have to have faith in many no-name products. Big customers don't always want something that's free, they want good value.
"IT managers are fearful their auditors will discover they have built systems on open source software which they don't own the rights to use," he adds.
The key issue will be support. Many resellers will be reluctant to get involved with Linux if the buck always stops with them. Even Unix resellers have reservations. Mark Byatt, marketing director at Unix reseller Morse, says: "We could support Linux, but who would support the resellers? Because the system is open source, it's written by thousands of people.
"Bugs can be fixed quickly, but there isn't an IBM or a Microsoft to back it up. It's an issue the Linux community will have to tackle if it wants Linux to be a mainstream environment for blue-chip customers," he adds.
Nonetheless, hardware vendors are being pressed to provide Linux support.
Hewlett-Packard recently began to offer round-the-clock support for the operating system, IBM provides first- and second-line Linux support, and Compaq is setting up in-house Linux support teams. Dell uses third-party support specialists such as LinuxCare.
But even vendors and support firms need somewhere to escalate calls.
Some of the most ardent devotees of Linux are waking up to the need, heretical though it may sound, to put the system on a commercial footing. "The main problem is, if you're giving away the software for free, how do you build a support organisation?" asks Bleasdale. "If we don't generate a mechanism for making money out of Linux, the system will collapse."
But despite its open source status, there's money to be made from Linux.
Although it can be downloaded free from the internet, or obtained on a CD-Rom for a few pounds from companies such as Cheap Bytes or Linux Emporium, users choose to pay between $50 and $80 for a shrink-wrapped copy from a distributor such as Red Hat, Pacific HiTech, Caldera, Suse, Debian, Slackware and others.
These include the Linux kernel - the operating system - as well as telephone support, manuals, installation tests, utilities, open source applications and test versions of paid-for software. It sounds basic, but it's enough to get users up and running and it saves on time downloading software from the web.
Although still low, prices are rising. Red Hat has raised the price of Linux from $49 to $80. And there are other opportunities. "Much of the revenue for distributors is on the surrounding products and services such as utilities, applications software and support," says Jollans.
Red Hat, the largest Linux distributor and strongest brand, has partnerships with several leading vendors and also plans to float the company on the stock exchange. Red Hat has a certification programme for resellers in the same way as the big vendors such as Microsoft and Novell.
Distributors' approach varies. According to a Gartner Group report: "Red Hat is driving a low-priced volume strategy by leaving proprietary software and price multipliers out of its distributions. Caldera's strategy is aimed at VARs and small enterprises with a tightly integrated package of file, print, mail, internet and client services."
The presence of US and Far East distributors in Europe is minimal, although Red Hat recently opened a UK office in Guildford, headed by Colin Tenwick, former head of Sybase.
But distributors still have a significant part to play, especially in providing an escalation path for support and liaising with the Unix kernel developers.
Hugh Jenkins, enterprise product marketing manager at HP, admits: "If the distributors weren't there, it would be very difficult for HP to offer its extensive support."
Some industry observers expect consolidation in the market, with perhaps two or three main distributors by 2003. But with the makings of a proper channel, are resellers queueing up to enter the Linux market? Not yet, as most seem to be playing a waiting game, supplying Linux when customers demand it, but otherwise keeping a rather low profile.
Perceptions of low returns, at least on software, are justified, according to Linux resellers. Malcolm Macsween, managing director of Enterprise Management Consulting, says: "Margins are almost certainly worse. People with money to spend will go for proprietary Unix systems. So even if the percentage margin is good, it's on a much reduced budget."
This view is echoed by Martin Petersen, technical director of Bristol VAR, LinuxIT. "It's a hard market to be in. Not only are software margins very small, but some people are selling it for no profit, and you can't compete with that. We sell CDs for about £14, but how can one live on that? Linux's open source status doesn't help at all."
He adds: "You work as hard to sell one copy as you do to sell 200, but you don't make 200 times the margin because customers buy one copy and duplicate it 200 times."
Paid-for applications do not generate much revenue either, with companies such as StarOffice selling for a fraction of the Microsoft equivalent. The lower-priced model can also have an adverse effect on the customers' perception of the overall system cost.
Robert Jefferson, commercial director of Compaq reseller Hawk Systems, says: "People don't say, because the operating is cheap, I can spend more money on the hardware. They tend to expect the hardware price to be in line with the operating system."
And the immaturity of the Linux software market makes life hard for the reseller. "We work with many small companies that have no commercial experience," says Petersen. "It's really difficult to be a reseller for companies like that. At the moment, they aren't commercially minded enough to want to support the channel."
But the low price does cut both ways. At $268 for 100 users, Linux can make turnkey systems much cheaper. "Customers aren't paying Windows NT licences and they're getting everything they want out of a box," says Macsween.
"Anyone who is developing bespoke applications, especially at the server end, would be mad not to look at Linux," he adds.
As for ancillary services, Linux systems require consultancy, installation, training and support like any other. Since it's unlikely to entirely replace existing operating environments, Linux will add to the complexity of customers' systems and therefore to their need for multi-vendor support. Linux's added-value opportunities are perhaps greater precisely because the system is immature and the software and management tools must be bolted together from different sources.
"Usually, money is made on the implementation. If someone wants to use Linux seriously, they'll need their hands held," says Jefferson. "When there is peak activity, customers will need more support."
He insists that, despite the low cost of the software, clients still seem happy to pay standard rates for Linux consultancy.
Although Linux is able to run on a 386 machine, Jefferson expects most customers to buy state-of-the-art processors if they install serious production systems.
Being a Unix variant, Linux is easy to understand for anyone who knows Unix, but it requires more retraining for Windows NT or Novell engineers and salespeople. This presents another opportunity.
"There are very few companies that have strong Unix expertise, but thousands of NT experts," says Stephen. "That's where the channel can make its money."
As a result, GB Direct has now started a lucrative sideline in configuring Linux machines which can even be done remotely.
Not that the Linux system is an easy sell, particularly to the wary corporate IT manager. "It's not so difficult to get customers to test it," says Petersen. "But if they do it the wrong way, they'll end up with their fingers burnt and they won't ever come back. That's a serious consideration and something that the reseller community would do well to note."
But resellers cannot ignore for much longer the potential of Linux, says Jenkins. "At present, some canny resellers are keeping a watching brief on events. Linux will certainly be a system that re-sellers will really need to understand, especially if they're involved with the internet."
A TEXT BOOK EXAMPLE: HOW POWYS COUNTY COUNCIL PROVIDED INTERNET ACCESS FOR 100 SCHOOLS
Powys, in mid-Wales, is a small, rural county with limited financial resources. So when the government's National Grid for Learning initiative imposed targets for providing email and internet access for more than 100 schools, Powys needed a cheap system.
Tim Fletcher, IT projects officer at Powys County Council, says: "If we'd used NT, we'd have had to have an NT box in every school, say £1,000, plus licences. Now, we're buying a fairly cheap box with no monitor. Overall, it's a saving of about 90 percent. It's a sound business scenario which has made us move from NT to Linux."
The council also saves on support and maintenance. "There are boxes we've never switched off since we installed them," he adds.
Powys had Linux enthusiast Nick Talbott on its IT staff and strong links with the University of Aberystwyth, where much of the development work was done because there were no Linux resellers around to provide development and implementation support. "I don't think it's easy to get started in this field," warns Fletcher.
Now Powys Council is testing Suse's Linux Office Suite 99 desktop software for use internally. "I'd like to see a significant move towards open source software for the desktop," he says. "We need the things computers can offer us, but we don't need the way Microsoft does them. I get quite irritated by the constant drive to upgrade hardware just to accommodate a lot of bloated software."
WHAT DOES LINUX FEED ON?
Compaq supplies Linux on its Alpha Risc platform. Hewlett-Packard and IBM support it on their Intel servers, and are having it ported to their HP9000 and RS6000 Unix Risc servers respectively. PC vendors such as Dell are offering it as a factory option, although sales to date have been small.
Software vendors, too, are increasingly happy to endorse Linux. By the end of the year, it should be possible to run Oracle, Informix and IBM DB2 databases, Lotus Domino, Novell NDS, Netscape and Corel WordPerfect under Linux. Other leading application vendors such as SAP are also porting to Linux, and Linux runtime licences are supported by commercial Unix variants including SCO, IBM's AIX and Sun Solaris.
Native Linux software is less well developed, although it boasts the world's most popular web server, Apache, and a good NT emulator, Samba - both open source products like Linux. Desktop software includes StarOffice, ApplixWare and Linux Office Suite, plus the graphics package Gimp. Windows software can be run on Linux using emulators such as VMware and Citrix Winframe.
READING BETWEEN THE LINUS
Linux (pronounced 'Linnux') is named after Linus Torvalds, who wrote the original core software while a student at Helsinki University from 1991 to 1992.
Linux is a rewrite of Unix, functionally equivalent but not owned by any main corporation. Torvalds owns the name, but the software is open source, meaning it is free to anyone who wants to use it. Anyone who makes changes to the core software must put the changes in the public domain.
Open source means what it says. Unlike commercial software, where customers only buy the right to use the software, with Linux they get the actual source code, which they can then tune to their own requirements.
But it is this unique distribution mechanism that makes Linux revolutionary - functionally it should be no different from branded versions of Unix, except it can run on low-spec PCs.
An estimated one million people worldwide have been involved in developing Linux - mostly people who find bugs, fix the code, then post the patch on the internet. There may be up to 20 such fixes a week. Periodically, a non-profit company called Linux International (Torvalds and a group of associates) gathers together the fixes, tests them, and then issues a fresh release.
Linux is just the operating-system kernel. Around it are a host of system management and other middleware products, some open source, some paid-for but still cheap. Many originated in the GNU project of the Free Software Foundation, founded in 1983 by Richard Stallman to promote co-operative development of non-commercial software.
One of the most prolific Linux developers is in Mexico.
Countries such as India, China and the former Eastern Bloc are also represented.
Most people write Linux code for the same reason they do crossword puzzles - for the intellectual fun of it.
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